Murdoch won't battle Microsoft for Yahoo
EmptyUPDATED 4:38 p.m. PT March 10
News Corp. chairman and CEO Rupert Murdoch said Monday that he won't battle Microsoft for Yahoo and reiterated his confidence about his conglomerate's position in a possible U.S. recession even though he said its TV stations are running about 5% behind management's original targets.
"Some deal (with Yahoo) would have been nice, but it's probably not possible," Murdoch said at the Bear Stearns 21st annual Media Conference in Palm Beach, Fla. "We're not going to get into a fight with Microsoft," which has been looking to buy Yahoo. "They've got a lot more money than us."
Added Murdoch, "We're very happy to be in the Google camp." News Corp.'s online social network MySpace has a Web search deal with Google.
MySpace last week had a record day, with 40 million people in the U.S. logging on Wednesday, the News Corp. boss told the conference. "That more than 10% of the population," he touted before adding that the Wall Street Journal could launch some social networking offer to allow people to discuss their investments.
Murdoch also said Monday that it would take two to three years for the recently launched Fox Business Network to pay off and shrugged off investor concerns about a possible recession or economic slowdown in the U.S.
"We have reduced our dependence on advertising from 41% of revenues to 23%," he said when asked about News Corp.'s recession risk. "The way to keep advertising is to be No. 1 in all we do."
TV station revenue so far this fiscal year is "about 5% behind what we hoped for," with some markets up and others down, Murdoch said. But Fox spot advertising is selling up to 40% above upfront prices, while rivals have no ad inventory to sell because of make-goods, the CEO said. "The rest goes to cable networks," which are all doing better, he said.
Overall, Murdoch said he has become more pessimistic about the U.S. economy in recent weeks but argued that "we're really in very good shape" in case of a recession.
He also touted the continued importance of broadcast network advertising for such big marketers as Coca-Cola, Procter & Gamble and AT&T. "They want mass audiences," he said.
Fox Business Network's leadership is focused on getting the network into more households, with distribution in 60 million-plus households the goal, Murdoch said. "Then (Fox News chairman) Roger (Ailes) will really blast CNBC," he vowed.
Asked whether the recently acquired Wall Street Journal could be a big profit center for News Corp. as well, Murdoch said it will be "not as big as Fox News or a lot of other things."
Also at the Bear Stearns media investor gathering Monday, Viacom CEO Philippe Dauman was asked about his company's move toward more releases that leverage the brands of Viacom's cable networks. He said the firm is looking at releasing two to three films a year using the MTV brand, a couple of Nickelodeon movies and one to two Comedy Central and BET films per year.
Dauman also vowed again to improve margins at Viacom's film unit but declined to provide a specific margin target.
Asked about the future of Viacom's relationship with DreamWorks Animation, he said a current partnership runs for a few more years and could extend beyond that. "We have a very good relationship with Jeffrey (Katzenberg)," Dauman said, adding that the DWA boss wants to take further advantage of Viacom's Nickelodeon network. The two firms are working on a TV show based on the "Madagascar" penguins, and Dauman said Monday that "we are working on a few others."
On the future of a relationship with DreamWorks' live-action team, Dauman again touted his connection with Steven Spielberg, predicting that the two sides "will be in this together one way or another for a very, very long time."
Disney CEO Robert Iger also touted brands during a keynote presentation, telling the audience that it didn't make sense to invest in such names as Touchstone, Buena Vista and Hollywood when Disney and ESPN were much more powerful.
He reiterated his desire to use new technologies as distribution platforms for Disney content, calling such a plan one of the best ways to combat piracy.
He also gave "huge credit" to his predecessor, Michael Eisner, for recognizing the value of an early partnership with Pixar, a company Disney eventually purchased.
Also at the Bear Stearns conference Monday:
> Google president of advertising and commerce Tim Armstrong said a recent dip in paid advertising clicks was intentional given Google's initiatives to reduce unintentional clicks and convert more of them into consumer actions.
> Comcast CFO Michael Angelakis said the cable giant has a "great" high-definition TV service but acknowledged that satellite TV rival DirecTV has so far done "a better job" of marketing its HD offerings.
He also said that Comcast will spend money on businesses with growth potential, like interactive advertising, and confirmed a New York Times report Monday that Comcast, Time Warner Cable, Cablevision Systems, Cox Communications, Charter Communications and Bright House Networks have made progress toward forming a joint venture to sell interactive ads to national marketers. Angelakis said Comcast will invest $50 million-$60 million into what is dubbed Project Canoe, which reportedly is getting $150 million in overall funding.
> Verizon Communications CFO Doreen Toben said that demand for its FiOS TV service has been "even better than we expected" thanks to strong word-of-mouth. The video service has allowed Verizon to retain traditional telephony customers and should be operating cash flow positive this year, she said.
Georg Szalai reported from New York; Paul Bond reported from Los Angeles.