If Rupert Murdoch decides to start a bidding war for Yahoo--that's the rumor du jour on Silicon Alley Insider--then we've truly entered the realm of the bizarre.
Not that it can't happen. I've been around this industry too long to underestimate the potential for bad decision making. Ego and daring often trump sound judgment. I won't devote more space revisiting the litany of corporate bungles that were originally hailed as strategic coups by the business elite. You can read my position on the wisdom of a Yahoo-Microsoft combination in my Friday column (click here).
Murdoch's business acumen speaks for itself and News Corp. is a terrific franchise. Like any of their rivals, it's keen to expand both audience and advertising reach. But would a pair-up between a huge media company and a technology company--one with a big online media component--work out? We've been there before. It's called AOL-Time Warner.
Rupert Murdoch plans to give away the digital version of the Wall Street Journal, making News Corp. the latest company to give up on paid subscriptions.
"We are studying it and we expect to make that free," Murdoch was quoted by the Associated Press as he spoke to a group of investors in Australia. He said that "instead of having one million (subscribers)," the company will receive readers "in every corner of the earth."
Murdoch is banking that a free model for WSJ.com, which recently announced that it had topped the 1 million-subscriber mark, will send readership skyrocketing and that advertisers will then flock to the site.
According to the AP, the Journal's subscribers generated about $50 million in annual revenue.
Few online services have succeeded at making a go of paid subscriptions but the Journal was widely considered to be at the head of the pack. In September, The New York Times stopped trying to sell subscriptions to premium content .
Here's a rumor we didn't see coming. The U.K.'s The Times is reporting that News Corp., the Rupert Murdoch-helmed company that purchased MySpace in 2005 for $580 million, may be willing to trade it. According to Times writer Dan Sabbagh's article, News Corp. is mulling a swap of MySpace to Yahoo in exchange for a 25 percent stake in the dot-com.
Interestingly enough, The Times is itself owned by News Corp. The parent company is allegedly "interested in a deal even if it means losing some control of MySpace because it would give the media group exposure to a far larger internet-based business," the story reads. Sabbagh notes, however, that the purported talks may fall through now that Yahoo's chief executive, Terry Semel, has stepped down from his post and been replaced by company co-founder Jerry Yang.
According to the Times, News Corp. mogul Murdoch has acknowledged that MySpace's most promising potential rival, Facebook, has been gaining ground in the wake of recent growth fueled by its recently launched developer platform. Yahoo, likewise, is allegedly interested in breaking into the social networking arena, where it currently is not a major player.
News Corp. is simultaneously attempting a $5 billion bid for fellow media company Dow Jones. At the same time, rumors that Yahoo would merge with Microsoft turned out to be unsubstantiated.
UPDATE: Both MySpace and Yahoo declined to comment on the matter.
Rupert Murdoch, the chairman of News Corp. and owner of the tabloids The Sun in England and the New York Post, is promising to retain the journalistic integrity of The Wall Street Journal and its parent company Dow Jones if he succeeds in acquiring them for $5 billion.
In a letter sent over the weekend to members of the Bancroft family that owns the company, Murdoch asked to meet with the family and company officials. He assured them that he is "first and foremost" a "newspaper man." "I have also always respected the independence and integrity of the news organizations with which I am associated," he wrote. Murdoch promised to establish an independent, autonomous editorial board, appoint a member of the Bancroft family to the board of News Corp., expand Dow Jones editorial in India and China, put more money into The Wall Street Journal's Washington, D.C., bureau, and invest in the newspaper's headquarters "to ensure it remains a state-of-the-art facility."
News Corp. made an unsolicited offer to acquire Dow Jones about two weeks ago. So far, Dow Jones and the Bancroft family aren't jumping at the opportunity.
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