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Murdoch Plans for Digital Era

Jan 16, 2006  •  Post A Comment

News Corp. Chairman and CEO Rupert Murdoch last week outlined a number of initiatives that will prepare the media giant for the digital age, including an effort to pump up MySpace.com into a Web titan and a plan to offer a wireless high-speed broadband product for DirecTV customers.

Speaking at a Citigroup investor conference in Phoenix, Mr. Murdoch said DirecTV, of which News Corp. owns a controlling 34 percent stake, will announce within the next two months “a very clear plan” on how the satellite provider will enter the high-speed Internet market using wireless technology. He noted that DirecTV has around $4 billion in cash on hand, which is allowing the company to explore whether to develop a technology on its own or to partner with a provider already offering a product.

Such a move has been highly anticipated since last year, when DirecTV said it was exploring ways to enter the wireless broadband space. As DirecTV and rival EchoStar Communications duke it out with cable operators, they have been held back to an extent by their lack of a high-speed Internet product. Cable operators for more than a year have been touting a triple-play offering of video, voice and data services. Satellite operators, meanwhile, have only the video component, which has compelled them to strike deals with telephone companies, which can offer the voice and data services.

However, two of the country’s biggest phone companies-Verizon Communications and AT&T-are now offering a video product, which has led analysts to believe any relationships they have with satellite operators will likely be downplayed going forward.

Meanwhile, Mr. Murdoch also said News Corp. is gearing up to bolster the services offered by MySpace.com, including a plan to offer free video downloads and a new instant-messaging service, including a Web-based voice product. While Mr. Murdoch said he doesn’t expect MySpace to become a Web portal like Yahoo, he thinks there are opportunities to expand the services that MySpace offers in a bid to keep visitors surfing the site longer, thus attracting more advertising dollars.