Rupert Murdoch Comments on Fox Interactive's Growth

Posted on Aug 9th, 2006 with stocks: NWS

Abbi Adest submits: On News Corporation's (NWS) Q4 2006 earnings conference call, Chairman and CEO Rupert Murdoch discussed the Company's prospects for FOX Interactive Media, specifically in light of the recent MySpace.com deal with Google (GOOG):

Rupert Murdoch:
Our newest efforts, the most exciting of which for me are our digital media assets represent our next generation of growth, poised to become drivers in the same way SKY Italia or FOX News or STAR are for us today. Indeed we just marked the third anniversary of FOX Interactive Media, fittingly marked with a Google deal we announced yesterday, and I think it's been a year of which we can be very satisfied, though not content.

In the space of just one year we've catapulted ourselves into a leadership position. Much of our success, of course, comes from MySpace, but it's not the only one. We're also enjoying strong performances from our category-leading sites across sports, gaming, lifestyle and entertainment. Our FOX Interactive properties now reach an audience of more than 75 million people a month. In fact, one in four people in America are now on our networks interacting with our content, tools and services. If you factor in our Internet assets, this number grows to more than 100 million people.

In the month of June alone, our web properties at FOX Interactive attained 30 billion page views, second only to Yahoo! and just yesterday served 4 billion ads. Today, more specifically this morning, I'm pleased to report that MySpace registered its 100 millionth user. As our traffic increases, so do our opportunities to monetize this volume directly through advertising and indirectly by bringing consumers to our more traditional content businesses.

The deal with Google, which we are guaranteed $900 million in payments across the next four years, is strong testament to our ability to monetize our vast and growing web presence.

To have achieved this much progress in one year is remarkable, but the real story is how well we are positioned for the future. Beyond the Google deal, and we hope this is just the beginning of a deepening relationship with that company, we're continuing to develop new ways of raising our community of MySpace users. We're also hard at work developing a new sets of co-gen tools to track price and sell advertising, having quadrupled the MySpace sales team to 55 people this year.

We are offering advertisers a new platform to reach consumers in intimate ways and have established working relationships now with 80 of the top 100 brand advertisers. We expect to launch MySpace into nine countries over the next year, having seen the success of our launches in Britain and Australia.

MySpace isn't the only platform with great potential. IGN Entertainment and Games ranks as the number one gaming information category website in the U.S., with 8.4 million unique users. Foxsports.com is the second-most popular sports property on the web. AmericanIdol.com reached 9 million unique visitors in just the month of May, achieving 70% growth year-over-year.

The creation of Mobizzo, our new mobile entertainment shopping mall, could prove to become an entirely incremental global distribution platform for our News Corp and other content.

Clearly, I'm excited about our prospects in interactive media. Previously I'd say that FOX Interactive could expect to generate at least $500 million in revenue this fiscal year. In light of our Google deal and other momentum, that should be pretty easy to reach. Other News Corp sites are generating a further 30 million unique visitors with about $100 million in revenue.

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