Citing the name of Jonathan Miller, head of News Corp.’s digital media group, Bloomberg reported that News Corp. (NWSA), a diversified global media company, seeks to reach a strategic decision regarding the future prospects of MySpace, its social networking site, in two weeks.
News Corp. had acquired the Beverly Hills, California-based MySpace in 2005 for a price of $580.0 million. Earlier, the company employed Allen & Co., a New York-based investment bank, to advice about the strategic alternatives for its social-networking website.
Flash from the past
The process was triggered way back after the site tumbled miserably, despite its early success, and it constantly lagged behind its competitor Facebook Inc. with respect to clients.
The buzz was that News Corp. might swap MySpace for a stake with a new venture of Vevo.com. However, no consensus has been reached on the deal, as Vevo.com is one of the numerous possible buyers of MySpace.
Speculation was also that MocoSpace might acquire MySpace at a price between $50.0 million and $200.0 million, as the media giant has been looking for strategic options to either spin off or sale off MySpace.
Moreover, in its endeavor to revive or restructure its sagging business, the social networking site lowered its headcount by 47.0% or approximately 500 staffs.
A month before, News Corp. reported soft third-quarter 2011 results. Despite witnessing robust performances across Television and Cable Networks segments, News Corporation’s third-quarter 2011 top and bottom-line results missed the Zacks’ expectation.
Total segment operating income, excluding one-time items, slipped 5.2% to $1,188 million during the quarter. However, News Corporation continues to expect fiscal 2011 operating income to increase in the low double-digit percentage range.
Founded in 1922 and headquartered in New York, News Corporation is a diversified global media company operating under Cable Network Programming (which includes STAR Group Limited), Filmed Entertainment, Television, Direct Broadcast Satellite Television and Publishing.
News Corporation’s significant international presence has helped it to broaden its client base and product portfolio. News Corporation primarily operates in the United Kingdom, Continental Europe, Australia, Asiaand Latin Americaapart from the United States. We believe that its strong international exposure will drive growth in the coming quarters.
Currently, we maintain a long-term ‘Neutral’ recommendation on the stock. Moreover, News Corp., which competes with Time Warner Inc. (TWX), holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
NEWS CORP INC-A (NWSA): Free Stock Analysis Report
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