News Corp enters Yahoo discussions

RUPERT Murdoch’s News Corporation has entered discussions with Yahoo about an alliance that would combine the News-owned MySpace with the internet giant, according to a Wall Street Journal report.

The talks add both flavour and drama to what is becoming a fight for Yahoo. The WSJ says the discussions are part of a strategy to thwart Microsoft’s US$45 billion (A$49.9 billion) unsolicited bid for Yahoo.

According to unnamed sources, the deal would involve News Corp getting a stake of 20 per cent or more in Yahoo. The IT industry blog TechCrunch is also reporting the discussions.

News and Yahoo have held discussions about a tie-up in the past that focused on the MySpace property being used to swap for Yahoo equity, but those talks have previously broken down over the valuation of MySpace.

But since Microsoft’s hostile takeover bid earlier this month, Yahoo has aggressively pursued other strategic alliances that would keep the company outside of Redmond’s grip.

The Yahoo board formally rejected the Microsoft earlier this week saying it undervalued the company. But Microsoft responded saying it would take all necessary steps to consummate the deal, and is likely to come back with a revised offer.

Meanwhile, TechCrunch is reporting that the first of the “inevitable” lawsuits have started to be filed against Yahoo from shareholders unhappy that the company rejected the Microsoft offer.

The web site reports that more shareholders are expected “to pile on board” legal actions as Yahoo further resists the Microsoft overtures.

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Newspapers’ online readership surge

JUST as the closure of The Bulletin magazine ended a 120-year publishing run, some good news has finally arrived for traditional media.

Newspaper web sites – as opposed to online newspapers – in the United States are enjoying a readership surge, suggesting that traditional media is handling the transition from paper to web.

A new report from Nielsen Online for the Newspaper Association of America found the average monthly audience figures for newspaper web sites grew by more than 3.6 million in 2007 to 62.8 million.

The numbers represented an increase of more than six per cent over the previous year. They are not staggeringly large numbers, but an improvement publishers have seized as good news regardless.

“Newspapers continue to successfully transform themselves into multimedia companies, offering unparalleled content that reaches an audience growing in both size and sophistication,” said NAA president and CEO John F. Sturm.

“Newspapers’ expanding print and digital portfolio offers value to advertisers by providing a targeted, comprehensive menu of choices for today’s discriminating consumer. As our industry’s transition accelerates, it is clear consumers recognize newspapers as their trusted source of information in an increasingly digital environment.”

For the year’s fourth quarter, 39 per cent of all active web users visited newspaper web sites, with visits averaging 44 minutes a month. Users generated more than three billion page impressions on average, a 7.3 per cent increase over the same period a year ago.

Meanwhile, News Corporation chairman Rupert Murdoch has told the World Economic Forum in Davos that plans to make the Wall Street Journal online free would not include all of the newspaper’s content.

Mr Murdoch said that while information that users can get “more or less as a commodity on different sites about finance” would be free on the WSJ site.

But the more specialist information, and the more specialist insights from the Journal about business and finance would remain a part of a subscription service.

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Murdoch dumps WSJ fees

MEDIA magnate Rupert Murdoch says News Corporation will drop the subscription model used by the online site of its latest masthead The Wall Street Journal in favour of free access.

Mr Murdoch said the company hopes to generate at least 10 to fifteen times as much traffic to the WSJ site by making it free. The company will make more money by attracting more readers, he said.

News Corporation is expected to complete its acquisition of WSJ owners Dow Jones – announced last month – by the end of the year.

Speaking at the annual News shareholder in meeting in Adelaide, Mr Murdoch said: “We are studying it and we expect to make that free, and instead of having 1 million (subscribers), having at least 10 million to 15 million in every corner of the earth.”

The WSJ.com site is one of the few internet sites to have successfully introduced a subscription model – charging its million readers an annual fee of US$50 (A$55).

After spending much the nineties as an online sceptic before ultimately becoming a big investor, Mr Murdoch told the meeting the internet was now generating US$1 billion a year for the company

While not expressing surprise at the size of the internet revenue, he did remark it was somewhat unsual given it came from a sector that “didn’t exist” as recently as a few years ago.

“I'd like to be able to say it was great prescience on my part but there's a certain amount of luck to it,” he said.

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