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BBC NEWS

What Myspace means to Murdoch

* Analysis *
By Jeremy Scott-Joynt
BBC News business reporter


* Just three months ago, news magnate Rupert Murdoch made an unusual
admission.

*He had realised, he told a high-powered audience at the American Society
of Newspaper Editors in Washington DC, that he had got something rather
important rather wrong. News Corporation, the global media group he controls, had failed
properly to engage with the online world - and risked losing its
hard-won position in news as a result. As a "digital immigrant" - as he described himself - he acknowledged he found it difficult to visualize how News Corp should change its ways. But he had no doubt that radical change was coming, and that it was inevitable. Commentators took the unusual "mea culpa" as a sign that News Corp was gearing up for a wholesale revamp of its approach to the internet. On 19 July, what appears to be the first really substantive part of the
new strategy swung into action: the purchase, for $580m, of the firm behind the wildly popular Myspace. com online community.

* Deja vu? *

Cynics may charge that Mr Murdoch has been here before. In 1999, another keynote speech laid out lofty ambitions for News Corp online - only for several well-financed operations to close down within months of their launch.

* Young people don't want to rely on a God-like figure from above to
tell them what's important *
Rupert Murdoch

Before that came failed initiatives such as Delphi Internet in the
mid-1990s, an online service which mingled News Corp's UK content with
US material and failed to capture anyone's imagination, and an abortive
internet service provider experiment called LineOne.

* Everyone's an editor *

Even so, buying Intermix - and thus Myspace - seems to match the
requirements Mr Murdoch laid down in his 13 April speech. The central message was that the days of newspapers editing content into a one-size-fits-all package to be consumed without question by the reader were numbered. Young people "don't want to rely on a God-like figure from above to tell them what's important," Mr Murdoch said. "And to carry the religion analogy a bit further, they certainly don't want news presented as gospel. "Instead, they want their news on demand, when it works for them. They want control over their media, instead of being controlled by it. They want to question, to probe, to offer a different angle."

Myspace fits neatly into that definition.

It is a network of pages - most set up by individuals, some by musicians and other creative types - each mixing self-generated text and pictures, links to other content elsewhere, and streamed music and video to create networks of friends and contacts. The result is a densely interwoven community, which its adherents - 14 million a month, by some measures - say is highly addictive. Not that different, in fact, from Mr Murdoch's description of a world
where users act as their own editors, choosing their own news and
content from the huge range of possibilities available online. Of course, every page of Myspace content contains adverts - and Mr Murdoch left his listeners in no doubt that their books would bleed red ink unless they found ways of exploiting the boom in online advertising.

* Backing brands *

What remains unclear is where the other part of Mr Murdoch's vision fits
in. Later in his speech, he talked of the importance of brands - the heart,
after all, of the News Corp empire. Despite the doomsaying, newspaper journalists and editors were perfectly positioned to keep supplying the core content on which the
communications communities would be built, he said. "We have the experience, the brands, the resources, and the know-how to get it done. We have unique content to differentiate ourselves in a world where news is becoming increasingly commoditized."That may prove challenging - after all, suspicion of existing media outlets is rife in weblogs and other chatty outposts of the web. Then again, earlier in July News Corp announced the launch of Fox Interactive Media, a hub for Fox news, sport and entertainment in the US. Myspace, News Corp says, could drive traffic to Fox Interactive Media. And most importantly, Myspace has detailed logs of its users'
preferences, online behaviour and personal information. That could help the company tailor what it does to the ever-more-discerning market which Mr Murdoch believes he has identified.


Story from BBC NEWS:
http://news. bbc. co. uk/go/pr/fr/-/1/hi/business/4697671. stm

Published: 2005/07/19 16:23:53 GMT
© BBC MMVIII
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