Sorta related...
Who's technology in the new BskyB box?
Fred, I bet you'll find more uses for it than just baseball...
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RUPERT DOES THE CYBERHUSTLE: Belatedly, Murdoch's News Corp. is tackling the Web
By Richard Siklos in New York, with Stanley Reed and Heidi Dawley in London
07/12/1999 Business Week
Page 88 (Copyright 1999 McGraw-Hill, Inc.)
Rupert Murdoch's News Corp. sells $12 billion a year worth of content to all corners of the globe, and Murdoch's place among history's top media magnates is secure. But when it comes to the Net, News Corp. has been seen as a laggard. While Web sites by such traditional media rivals as Time Warner, Walt Disney, and NBC routinely rank among the 10 most visited, according to Media Metrix, the most popular News Corp. information site ranked a withering No. 71 in May.
Murdoch admits he has missed some Internet bonanzas--such as his decision a few years ago against taking a stake in America Online Inc. ''Bill Gates assured me [AOL] would be done by Christmas,'' recalls Murdoch. ''He told me: 'They don't have a business plan.'''
But Murdoch won't concede he has missed his chance on the Web--any more than he accepted there was no room for a fourth U.S. TV network when he launched the Fox Network. He is ramping up a Web strategy aimed at extending into cyberspace an empire that also embraces the 20th Century Fox film studio, satellite broadcasters in Asian countries and Britain, newspapers in Australia and Britain, the New York Post, a handful of cable channels, and book publisher HarperCollins.
News Corp. seems to have awakened to the Web's possibilities--especially in the far-flung countries where the Internet is less developed but where Murdoch's tentacles extend. In Australia, it's launching career and auction sites; in Britain, it's rolling out a free Internet service provider, called CurrantBun, linked to its racy Sun tabloid.
Murdoch is also branching out into new Net territory, forging a partnership with the star of Web investing, Softbank Corp.'s Masayoshi Son. Meanwhile, as Disney and NBC pursue a new strategy of using traditional media muscle to drive Web-users to their Go.com and Snap.com portals, Murdoch is betting on his half-interest in TV Guide Inc. He thinks interactive guides for cable TV could prove to be the ideal portal for TV and, eventually, the Web. ''We clearly are laying the groundwork for a much bolder approach to the Internet,'' he says. ''WAKE-UP.'' What's behind the push? Murdoch's son and News Corp. Executive Vice-President Lachlan Murdoch says AOL was only one instance: Last year the company passed on a couple of Web businesses whose stocks subsequently zoomed. Says Lachlan: ''There were a couple of wake-up calls there.''
To try not to miss any more windfalls, News Corp. in April committed as much as $300 million to create a new venture-capital company, called e-partners, that will invest in Web businesses unrelated to its core media operations. A step in that direction was the planned July 1 announcement by e-partners that News Corp. and Softbank are forming e-ventures, a $50 million partnership to launch versions of U.S. Web businesses in Australia, Britain, India, and New Zealand. E-ventures' first deal is to launch eLoan, the biggest online mortgage broker in the U.S., into those markets.
News Corp. will provide its local presence and marketing savvy, while Softbank--with big stakes in Yahoo! Inc. and E-Trade, among others--seems to know a good Web investment when it sees one. ''What it does is marry the leading Internet investor with a new entrepreneurial group within a big media company,'' says e-partners CEO Mark Booth, the former head of Murdoch's BSkyB satellite service. ''We can deal at a speed and scale that we think is very unique.'' Keen on financial services, e-partners has also taken a minority stake in W.R. Hambrecht & Co., the Silicon Valley investment bank specializing in taking companies public on the Web via auction.
Although skeptical of Web stock valuations even at current levels, Rupert Murdoch is keen to make acquisitions--if, as he predicts, there is a ''major correction'' in Web stocks. ''There may be a lot of little companies that have really good ideas that are now selling for a couple of billion dollars that would then be selling for $500 million,'' he says. ''That would be of interest to us.'' CHELSEA CHIC. And if the notion holds true that the Internet is to be ruled by twentysomethings, Murdoch has that angle well covered in the family. While Lachlan, 27, has been pegged as the one most likely to succeed his 68-year-old father, the company's online strategy is overseen by the youngest of Murdoch's four children, James, 26. He operates News America Digital Publishing from offices in New York's hip Chelsea district--brimming with Fox online programmers and producers and located at a safe remove from News Corp.'s midtown office tower. In the past year, James has overseen a string of Web-related moves, including small stakes in business site TheStreet.com, online service juno.com, pharmacy site PlanetRx.com, and, most recently, community site sixdegrees.com. Typical of how media companies are trying to integrate Web businesses with so-called ''old'' media, TheStreet.com will be featured on a Fox News Channel TV show. And the stake in PlanetRx ties into Fox's plans to launch a Web site linked closely to its new Health Network cable channel.
While he's constantly studying new deals and revamping Fox's existing sites, James's 200-strong group is also developing interactive TV services and broadband versions of the Fox news and sports sites for high-speed access services, such as At Home Corp. and Road Runner. With only 30% of Americans on the Web so far and with most of them using dial-up services for Internet access, such services won't be put to the test anytime soon.
But James believes that once broadband access becomes widespread in 5 to 10 years, content providers will win the day, thanks to their familiar brands, sports rights, and program libraries. And both father and son are of the mind that digital television--which will allow content to be ordered up on demand and played with--could prove a more viable business than the Web itself. ''We're not freaking out about today,'' says James. ''We're trying to build long-term earnings stories out of these businesses.''
In News America's office, for instance, is a demo version of an enhanced broadcast for one of the many sports rights News Corp. owns--a Major League Baseball game. Using a special remote control and a variation of a set-top digital box being introduced later this year to BSkyB subscribers, fans can choose from a number of camera angles from which to watch, check statistics, or split the screen to watch a replay. ''We talk a lot about interactive TV because we think this is where all this stuff leads,'' says James. EUPHORIA. It is also where News Corp. has performed a feat of Web alchemy. Last year it merged what seemed a declining asset--TV Guide magazine--with a unit of John C. Malone's Liberty Media Corp. that includes a maker of onscreen guides. Partly on the strength of an exclusive deal with new cable heavy at&t Corp., TV Guide Inc. has since caught fire with investors excited about the prospect of a screen that pops up every time the TV--or whatever it evolves into--is turned on. Through the guide, viewers could be able to perform Web-like tasks such as sending E-mail and ordering pizzas. Since the merger was announced a year ago, News Corp.'s 49% stake in TV Guide has increased in value by $1.3 billion.
These days, of course, such gains from Web euphoria can seem routine. Even with News Corp.'s stepped-up plans, the likes of Disney, Time Warner, and NBC remain more active and more advanced. Thomas Rogers, president of NBC Cable, says there are ''a lot of questions'' about whether consumers will rely on the TV Guide screen to navigate the digital world, or just click through it to another portal such as Yahoo! or NBC's Snap. And while Rogers agrees that it is too early in the media Web wars to declare winners and losers, he believes companies like his that have already established a beachhead have the edge. ''Other companies have done more than us, but I don't know that they have a lot to show for it,'' says Rupert Murdoch.
The endgame, says Larry Haverty of State Street Research in Boston, is for all the media giants to try to grab a piece of the lucrative subscription, advertising, and E-commerce model that so far only AOL has perfected. ''If you look at AOL as a big cable network, they've got a big market capitalization and these people want to encroach on it.''
But better than most, Murdoch knows what Web mistakes feel like. Aside from missed investment opportunities, his failed mid-'90s attempt to build Delphi Internet Services into a major online service remains a blemish. ''We made a lot of mistakes there,'' he admits. Clearly, he is determined not to repeat them. In fact, the just-remarried mogul was planning to cut into his honeymoon to fly to London to attend the announcement of the Softbank partnership. In old or new media, Murdoch plays to win.
RUPERT.com
News Corp.'s Net push includes:
-- A half-stake in TV Guide and its interactive programming guides to navigate TV-Web convergence -- The newly created $300 million e-partners, which has formed a partnership with Softbank to launch U.S. Web businesses internationally -- Increased investment in newspaper sites in Australia and Britain, plus foxnews.com, foxsports.com,and fox.com -- Small stakes in Web companies TheStreet.com, Juno Online Services Inc., sixdegrees.com, and PlanetRx.com
Photograph: FATHER AND SON Rupert concedes that the company has missed past Net bonanzas. Now, James, 26, is orchestrating its online strategy JOHN S. ABBOTT
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