Friday, September 09, 2005
Murdoch Grabs IGN for $650M
September 8, 2005
Rupert Murdoch’s media conglomerate News Corporation said on Thursday it will acquire the video game web site company IGN Entertainment for $650 million in cash as the latest purchase of the company’s online spending spree.
News Corp.’s purchase reflects an industry trend as advertising dollars increasingly move to the Internet. Forrester Research predicts the
Mr. Murdoch, News Corp.’s chairman and CEO, said the IGN acquisition brings the company a long way toward its objective of becoming a “leading and profitable Internet presence.” IGN Entertainment owns web-based video game fan sites like GameSpy and TeamXbox, along with film review site Rotten Tomatoes. With IGN added to its online sites, News Corp. said that the company’s web traffic will increase to nearly 70 million unique monthly visitors, and 12 billion page impressions per month. “The acquisition of IGN adds a significant visitor base in the gaming sector, and increases Fox's exposure among the prized 18- to 34-year-old male audience,” said Jack Flanagan, senior vice president of comScore Media Metrix. “The acquisition is a good complement to the company's other assets in the online space.” Mr. Flanagan added that online advertising is a growing trend, reflected in acquisitions such as Dow Jones’ purchase of Market Watch and the New York Times’ purchase of About.com. “Marketers are increasingly turning to the web for their advertising dollars,” Mr. Flanagan said. New York City-based News Corp. posted annual revenues of $24 billion for fiscal year 2004, from its wide array of media companies like the Fox Network, 20th Century Fox, DirecTV, the New York Post, and the Times of Over the past year Mr. Murdoch has snapped up a number of popular web properties. In July, News Corp. acquired Intermix Media, the company that operates the social networking and music site MySpace.com, for approximately $580 million (see Murdoch Buys Intermix: $580M). News Corp. also bought Scout Media, which operates sports sites and team magazines, in August for an undisclosed amount. The company has also been widely reported to be in talks with search engine provider blinkx about a possible acquisition, and also was rumored to have offered $3 billion for Internet telephony provider Skype. Reports on Thursday suggested Skype is now in talks with eBay (see eBay Mulls Skype Buy). Online Ads As consumers move away from traditional media like television and newspapers, advertising dollars have moved to new media like the Internet and video games. According to Forrester Research, online advertising made up 5 percent of advertising budgets last year and will make up 8 percent by 2010. Yankee Group predicts that video game advertising will bring in $1 billion by 2010. Nielsen Media Research found that video games accounted for a 7 percent decline in TV ratings among 18- to 24-year-old males at the start of the 2003-2004 television season. Industry executives already say that the return on investment for magazine advertising is around 0.5 percent as opposed to the 14 percent ROI for email marketing and search engine optimization. Going forward, Mr. Flanagan said Fox’s acquisitions may look a little different. I would be surprised if News Corp added any more online sites with similar content, like games or social networking,” he said. “Likely the company is rather looking to acquire an e-commerce site or an online search site.”
source:http://www.redherring.com/PrintArticle.aspx?a=13506§or=Industries
