NEW YORK (Reuters) - News Corp. (NYSE:NWS - news) on Monday said it would buy Intermix Media Inc. (AMEX:MIX - news), owner of the popular MySpace.com social networking site, for $580 million in a move to expand the media conglomerate's Internet offerings.
The deal comes after News Corp., home to the Fox television network, Fox News and 20th Century Fox film studios, announced on Friday the creation of an Internet division to hold the company's sports, news and entertainment sites.
News Corp. will pay $12 a share, a 12 percent premium over Intermix's closing price on the American Stock Exchange on Friday. Accordingly, Intermix shares rose 9.6 percent to $11.75 in Monday trading.
"For a company with a market capitalization of over $50 billion and $6 billion in revenue last quarter to pay $580 million for the fifth most widely viewed domain, that strikes me as reasonable," said Natexis Bleichroeder analyst Alan Gould.
"With a significant amount of advertising dollars moving from traditional outlets to online, News Corp., like most media companies, is looking to boost its Internet assets," Gould added.
Online advertising is expected to be the fastest growing category for national advertisers, up 15 percent to $7.9 billion this year, according to media buying firm Universal McCann.
MySpace.com is the most popular of the once-trendy social networking sites, which allow people with common interests to seek dates, friendship and professional relationships.
Google Inc. (Nasdaq:GOOG - news), for its part, has a social networking site called Orkut. Yahoo Inc. (Nasdaq:YHOO - news) has made social networking a part of its Yahoo 360 networking tool.
"The thing about MySpace is that it's a growing audience," said Jupiter Research analyst David Card. "Its users are pretty loyal. They get a lot of time spent on their pages. And the personal information they get from users is pretty reliable because they want to meet people. One would think this information would be pretty useful to advertisers."
Intermix, which had $24.1 million in revenue in its fiscal fourth quarter, will become part of News Corp.'s newly created Fox Interactive Media.
News Corp. had said on Friday it plans to make "strategic investments" in this area. The creation of the Internet unit comes three months after News Corp. Chief Executive Rupert Murdoch's exhortation to the newspaper industry that it was too slow to respond to the Internet.
Intermix was the target of a lawsuit by New York State Attorney General Eliot Spitzer, who accused the company of false advertising and deceptive business practices in bundling hidden spyware that delivered pop-up advertising and redirected Web traffic to an Intermix search engine.
The company agreed to pay $7.9 million to settle suit without admitting wrongdoing. It had previously stopped distributing such programs.
The News Corp. deal is expected to close in the fourth quarter of calendar 2005.
Intermix's largest shareholder, VantagePoint Venture Partners, which holds 22.4 percent of the company, has agreed to vote its shares in favor of the deal, News Corp. said.
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Let the non-stop spamming and advertising pop-up bombarbment of MySpace users re-commence.....legally.
Joined: Sun Oct 17, 2004 7:19 pm Posts: 39068 Location: Chapel Hill, NC, USA Gender: Male
Serjical Strike wrote:
suchpj wrote:
For the record, the title of this thread should read.
Owners of Fox to Buy Myspace.
A little grammer goes a LONG way.
So does spelling.
BOOM! HEADSHOT!
_________________ "Though some may think there should be a separation between art/music and politics, it should be reinforced that art can be a form of nonviolent protest." - e.v.
Joined: Sat Oct 16, 2004 11:54 pm Posts: 12287 Location: Manguetown Gender: Male
Serjical Strike wrote:
_________________ There's just no mercy in your eyes There ain't no time to set things right And I'm afraid I've lost the fight I'm just a painful reminder Another day you leave behind
Joined: Mon Oct 18, 2004 2:16 am Posts: 1213 Location: Greenwich CT
Estranged wrote:
Oh great! Another CNN/Time Warner media whore.
Um, NewsCorp was a media whore WAY before CNN/Time Warner. If anyone is interested in seeing film about NewsCorp and Fox watch OutFoxed. Its really interesting.
_________________ ~ Me fail English? That's unpossible. ~
Joined: Sun Oct 17, 2004 12:39 pm Posts: 3306 Location: 4336 miles west of St. Albans
suchpj wrote:
Estranged wrote:
Oh great! Another CNN/Time Warner media whore.
Um, NewsCorp was a media whore WAY before CNN/Time Warner. If anyone is interested in seeing film about NewsCorp and Fox watch OutFoxed. Its really interesting.
I don't really care which came first. I'm just sick of these media giants.
_________________ But if home is where the heart is
then there's stories to be told.
No you don't need a doctor
no one else can heal your soul.
Joined: Sun Oct 17, 2004 7:19 pm Posts: 39068 Location: Chapel Hill, NC, USA Gender: Male
It feels like these events should bother me, but they don't.
_________________ "Though some may think there should be a separation between art/music and politics, it should be reinforced that art can be a form of nonviolent protest." - e.v.
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