March 31, 2006

News Corp. Has Grand Plans for MySpace

NEW YORK -- While News Corp.'s recently acquired online community destination MySpace.com is thriving in its current form, the media giant already is devising plans to make the site even stickier and more profitable, possibly by acquiring so-called "Web 2.0" properties, enabling transactions between members and adding subscription offers.

"We're looking for technologies or feature sets that give users tools to participate in the media rather than just sit back," Ross Levinsohn, president of News Corp.'s Fox Interactive Media unit, told the annual Bank of America Media, Telecommunications and Entertainment Conference here Thursday.

He said News Corp. could find a middle ground between traditional push media and user-generated content by providing the seed of an idea or a topic that online users react to.

"I'm really intrigued by some upstarts," Levinsohn said. "They don't cost an arm and a leg, and they have feature sets that could get us places faster."

Web 2.0 refers to online destinations with more advanced interactive capabilities that allow people to share and collaborate.

Levinsohn mentioned such firms as photo management and sharing site Flickr and video-sharing site YouTube as examples of Web 2.0 players he respects, but he didn't specify possible takeover targets. He also said News Corp. feels there are no major Web players out there that it really needs to own.

Asked about social-networking site Facebook, Levinsohn said that company would be too expensive. "We are certainly not paying $2 billion for Facebook," he said, adding that he would look at a deal at a more attractive price and he wasn't even sure the company really was for sale.

BusinessWeek reported on its Web site this week that Facebook has turned down a $750 million takeover offer in the hope of getting a $2 billion bid. A spokeswoman later denied the report and said Facebook had not put itself on the auction block.

The music space and a couple of other areas are where his team is looking for subscription opportunities on MySpace, Levinsohn said, pointing out that the site on average serves about 50 million music streams a day.

In addition, he said there is a business in "enabling (users) to trade, sell or swap" things.

Plus, recent research by his team found that 10,000-15,000 of the pages on MySpace are run by such businesses as club promoters, theaters and the like whose support he signaled could become a business for MySpace as well. "Over the next six months or so, we will focus on this business-to-business opportunity," he said.

On the advertising side, Levinsohn also sees additional upside. A recently formed custom solutions unit already is negotiating "some big, big deals" with major marketers to capture opportunities across all of Fox Interactive's online assets, the executive said.

Levinsohn also told investors Thursday that he expects to have an ad-search deal in place with one or several partners within the next 45 days or so. "We have spoken to everybody and feel we have a pretty significant opportunity here," he said.

Overall, Levinsohn said he sees MySpace and others as the "new new-media" elite compared to such "old new-media" players as Yahoo! Inc. and Microsoft Corp.'s MSN.

Levinsohn also touted MySpace's recent efforts to improve its safety. The site has removed 200,000 "objectionable" profiles with hate speech and risque content, he said.

Reuters/Hollywood Reporter


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