News Corp. buys stake in video's ROO
EmptyNews Corp. has agreed to purchase as much as a 10% stake in ROO Group Inc., an online video technology provider.
News Corp., run by chairman and CEO Rupert Murdoch, has initially agreed to purchase a 5% stake in the company. There is an option to purchase up to an additional 5% of shares if revenue milestones are met within the next two to three years.
ROO has had a relationship with News Corp. for a year and a half, syndicating content for Fox News Channel and Sky News as well as print properties including the Times of London and the Australian.
"The aim of the deal is to expand the business that we do between the two groups," ROO chairman and CEO Robert Petty said. "It's a traditional strategic win-win."
Several outlets reported that the deal was worth $12 million, but Petty, though he could not disclose specific figures, called this an "assumption." "The true value of the deal won't be recognized for another 12 months," he said.
Petty said the deal keeps with the companies' focus on the Internet as a global media platform and that both groups have similar goals as to how to grow their business on the Web. He pointed out that a huge corporation like News Corp. has many choices when it comes to deciding on an Internet video vendor.
"This is not a decision that would have been made quickly," Petty said. "It is a very well-thought-through deal, and we know this has Mr. Murdoch's blessing."