Sunday, November 27, 2005

Murdoch predicts demise of classified ads
Murdoch predicts demise of classified ads
By Andrew Edgecliffe-Johnson
Published: November 24 2005 17:59 | Last updated: November 24 2005 17:59

Rupert Murdoch has added to the gloom surrounding the US newspaper industry, saying that the business model of most titles is under threat as classified advertising moves online and circulations fall further.

The News Corporation chairman, who once decribed classified revenues as “rivers of gold”, said: “Sometimes rivers dry up.”

Interviewed by Press Gazette, a UK trade publication part-owned by his son-in-law, he added: “I don’t know anybody under 30 who has ever looked at a classified advertisement in a newspaper.”

His comments came as Knight Ridder, the US’s second-largest newspaper group, yielded to shareholder pressure and retained advisers to explore “strategic alternatives”, including a possible sale, in response to rising newsprint costs, declining circulation and more competition from the internet.

Mr Murdoch, who owns the New York Post, indicated that US newspapers’ editorial strategies were to blame for their financial problems. “Outside New York, it’s all monopoly newspapers. Some have good work in them, but it tends to be overwritten, boring and elitist, not a reflection of the general mood in the public.”

After spending $1.5bn so far this year on acquisitions such as, a fast-growing online community, and IGN Entertainment, a games and content site, Mr Murdoch disputed the recent claim by Sir Martin Sorrell, chief executive of WPP, that some traditional media owners were panic buying new media assets.

“There’s no panic, and there’s certainly no overpayment,” he said. “It was a very careful strategy to go for the two biggest community sites for people under 30. If you take the number of page views in the US, we are the third biggest presence already.”

He admitted that News Corp was not the most profitable online media group, and said it had “a huge amount of work ahead to get that whole thing right”.

Mr Murdoch also criticised newspapers in the UK, where he owns titles including The Sun and the Sunday Times. Recent attempts to boost circulation by giving away a DVD with each copy must stop, he insisted.

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+ Related
Murdoch shares ‘vision for internet’
By Andrew Edgecliffe-Johnson, Media Editor
Published: September 12 2005 17:25 | Last updated: September 12 2005 17:25

Rupert Murdoch has told his senior executives they must find ways to integrate their traditional publishing and broadcasting operations with the internet assets in which News Corporation has invested in recent months.

Delegates at a weekend News Corp summit in Carmel, California, were told that different parts of the media conglomerate needed to start talking more to each other to find more ways of collaborating online.

The summit also focused on identifying which of the group’s existing news and sports brands – which range from the Fox TV channels in the US to The Sun and The Times in the UK – could best be used on News Corp’s new online platforms.

A further priority was to ensure that different divisions were using technology that was compatible across the company, according to one person who attended.

Neither James Murdoch, his younger son who was in charge of the group’s internet strategy before becoming chief executive of British Sky Broadcasting, nor his older brother Lachlan, who resigned from his executive duties in July, attended the summit.

Mr Murdoch also invited outside speakers including George Gilder, author of a technology investment newsletter called The Gilder Report, and representatives of Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital group.

The summit, the second in seven months to address News Corp’s internet strategy, follows Mr Murdoch’s speech to the American Society of Newspaper Editors in April, in which he said that digital technology was driving “a revolution in the way in which young people are accessing news” which would require “a transformation of the way we think about our product”.

Since then, News Corp has formed a new online division, Fox Interactive Media. It has announced the $580m acquisition of Intermix Media, which operates a social networking site called; bid $60m for Scout Media, which publishes sports websites; and last week unveiled a $650m takeover of IGN Entertainment, an internet game information company.

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