November 6, 2009
Despite Sluggish MySpace, News Corp Reports Profit Increase in Q1
News Corp is seeking to make major changes to MySpace, its once dominant social networking site.
News Corp purchased MySpace in 2005, when the social networking site was at the top of its competitors. Since then, it has fallen behind in popularity, being overshadowed by Facebook and micro-blogging site Twitter.
According to comments from Chase Carey, chief operating officer of News Corp, MySpace's trailing numbers have caused it to fall about $100 million short of a deal with Google.
"I think we got spread a bit wide and thin and what we're focusing on is sort of the heart of our business going forward really being a social network around key content," said Carey.
"We're not trying to compete with Facebook or beat Twitter. We're trying to create a unique experience."
Despite MySpace's shortcomings, News Corp told analysts on Wednesday that it saw an 11 percent profit increase for the first quarter. The company reported net income of $571 million, or 22 cents per share for the quarter that ended September 30.
Revenue dropped 4 percent to $7.2 billion from $7.5 billion last year.
"At our U.S. television operations, we're seeing marked improvement from last year when we experienced the largest ever year-over-year drop in earnings in our history," said Chief Executive Rupert Murdoch.
"Fortunately, we appear to be emerging from the bottom of that cycle."
"The strategic steps we took last year to ensure stability during the downturn have proven successful, with significant cost reductions offsetting much of the revenue declines in our television and newspapers and information services segments," added Murdoch.
"The economies in which we do business are clearly in better shape than they were a year ago, and we have further positioned our operations to take advantage of the improvements we are seeing globally. We will continue to manage our businesses smartly and confidently under the security of a strong balance sheet."
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