News Corp. Seeks Search Engine Investment

Aug 10, 2005  •  Post A Comment

News Corp. Chairman and CEO Rupert Murdoch said Wednesday that his company is looking to invest in an Internet search engine as it presses ahead with an aggressive plan to raise its online profile.

Mr. Murdoch made the announcement during a conference call to discuss the company’s fiscal fourth-quarter and full-year results, but did not provide many details of how much of an investment would be made or what companies are being considered.

Over the past few weeks News Corp. has shifted its online efforts into high gear, creating a new unit to focus on Internet activities and acquiring Intermix Media, a company that owns numerous Web sites, including social-networking site MySpace.com.

Meanwhile, Mr. Murdoch refused to answer repeated questions from analysts and the media about the story behind his son Lachlan Murdoch’s surprise resignation two weeks ago. He likewise refused to say whether his son’s departure would lead to executive changes at the television station operation, which Lachlan led.

For the fourth quarter ended June 30, News Corp. posted a 67 percent surge in profit, while revenue rose 12 percent to $6.1 billion. For the full year, the company’s profit was $2.1 billion, compared with a year-earlier figure of $1.5 billion. Revenue for the 12-month period jumped 15 percent to $23.9 billion.

The company’s cable properties continued to lead the growth, with full-year operating income rising 44 percent to $702 million. Fox News Channel served as the main growth driver, posting 40 percent operating income growth, mainly on the strength of advertising revenue. FX and the Fox Regional Sports Networks also posted strong operating income growth thanks to higher affiliate-fee revenue, which was partly offset by higher programming costs.

At Fox Broadcasting, operating income fell due to higher programming costs associated with several returning series, which offset revenue gains related to higher advertising rates. At the company’s television stations, operating revenue slipped 5 percent due to a soft advertising market and the negative impact of Local People Meters in several markets.