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
