The latest issue of Wired magazine has a useful profile of Rupert Murdoch’s News Corp, which Wired has elevated to number 9 in its latest Wired 40 list (it didn’t even make the list last year). The article focuses on News Corp’s $580 million acquisition of MySpace last year, which has not only shown dividends due to MySpace’s recent stellar user growth – but has also given Murdoch his ticket to Internet hipness.
Looking past the shallowness of conferring Net wisdom onto Rupert Murdoch just because he acquired an innovative Web company, the article does actually show that Murdoch and News Corp are onto it in regards to planning for an online media future.
I particularly liked this passage about News Corp’s strategy:
“Over two months in spring 2005, [Ross] Levinsohn and a handpicked team hammered out an 80-page strategy document. A Yahoo- or MSN-style portal was out, they determined: Fast connections and search engines made aggregating content superfluous. Broadband-ready “aggressive vertical categories” were in, pegged to sports, news, and entertainment – areas where News Corp. had mountains of content, standout stars, and demographic expertise. Above all, the report concluded, speed was critical. M&A, not the company’s customary homegrown approach, was the fastest path forward.” (emphasis mine)
M&A is proving to be the modus operandi of all the big companies – Google, Microsoft, Yahoo, eBay, etc. So it’s no surprise News Corp opted for that route too. However the bit about portals being out and “aggressive vertical categories” (let’s call this AVC) being in, will be news to the likes of Yahoo and MSN.
A bit later in the article, we find out that News Corp will also use the AVC approach in MySpace::
“Levinsohn, for his part, thinks one way to make the site more ad-friendly is to introduce miniportals focused on MySpace core interests – music, movies, and comedy so far – that offer advertisers “clean” (that is, professionally designed and managed) pages. Smart stuff – but again, tidy the place up enough to make American Express happy, and it won’t be MySpace anymore.” (emphasis mine)
The challenge for MySpace, as the above extract hints at, is striking that balance between keeping their millions of young content-generating users happy – while giving advertisers some form of quality control. Judging from a further Levinsohn quote later on in the article, News Corp sees this not as a content challenge… but a marketing one:
““You’ll see us morphing from a content company into a marketing company,” Levinsohn says, “a youth marketing company especially, because that’s where everything starts. No one is going to be able to control the flow of content the way we used to. MySpace gives us the ability to look inside and understand how hits get created” – that is, to spot micro-niches, track early breakouts, and identify hot IM buzzwords as they bubble up.” (emphasis mine)
So News Corp’s strategy for the Web is to create lots of vertical niches and mini-portals, much of which will be filled with what other companies are calling ‘user-generated content’ (a term refreshingly absent from this article). But rather than edit or otherwise try and control this mass of amateur and professional content, News Corp will try and find ways of marketing and promoting it across many verticals and niches. That sounds like an excellent strategy to me and I’m fascinated to see how it pans out over the next few years.
Photo of Ross Levinsohn, from News Corp: Dan Farber
Originally published on ReadWriteWeb (archived copy)