News Corp. (NWS) reported its quarterly net profits have risen by 19 percent. The main reasons being advertising revenue from the Fox News Channel, "Ice Age: The Meltdown" ticket sales and radio stations they sold, according to Reuters.
News Corp.'s fourth-quarter profit was $852 million, or 27 cents per share, up from last years profits of $717 million, or 22 cents per share. Revenue grew 11 percent to $6.8 billion.
Even though its traditional media advertising revenue was the main catalyst of the profits, it is their Internet play that still has everyone buzzing. The recent deal with Google, worth a mininum of $900 million in cash (guaranteed by Google), for the right to be the search advertising partner on MySpace, has everyone, including Murdoch, thinking that this will drive growth like some of their past assets.
Murdoch was quoted as saying, "Most excitingly for me, our digital-media assets represent our next generation of growth, to become drivers in the same way Sky Italia or Fox News (Channel) or Star (Group) are for us today." This is spite of the fact that it is not contributing much at all to the overall company bottom line. Yet MySpace has added its 100 millionth member this week.
The deal with Google (GOOG) has already made MySpace a winner from a company investment view, still the question remains whether the current teen users will leave it in droves as they move into the workplace or start families. For the short-term though, it does look good for them.
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