Publishing giant Murdoch predicts decline of portals

Rupert Murdoch warned Monday that portals run by Yahoo Inc. and Microsoft Corp. will fade as savvy users go directly to the content they want to view.

Portals like those from Yahoo and Microsoft will fade in popularity as savvy users go directly to the content they want to view, publishing titan Rupert Murdoch said this week.

"Young people today -- who are the great users of the Internet -- know exactly what sites they want to go to and they go there," Murdoch said at a media investor conference Monday sponsored by Citibank NA. "They don't have to go and work their way through Yahoo's home page or MSN's or someone else's."

The News Corp. chairman's prediction comes as the company plunges into online media after several years of sitting on the sidelines. He acknowledged criticism that his company was late to invest in the Internet, and said pressures of flat revenue from its traditional print media have been a wake-up call. Broadband access has only recently expanded, he noted, and Murdoch said his company avoided losing money several years ago on Internet projects.

News Corp. bolstered its online holdings last year with several acquisitions. It bought IGN Entertainment for US$650, which ran a network of Web sites for gaming enthusiasts. Also brought into the fold were Intermix Media, which ran MySpace.com, for US$580 million, and Scout Media, a publisher of Web sites and sports magazines.

The acquisitions sharply increased News Corp.'s online readership, and Murdoch said his content has the third highest number of paid views in the U.S., behind Yahoo and MSN but ahead of Google or eBay. He projected that News Corp.'s main sites, including sports and former IGN sites plus Myspace.com, will have revenues of US$350 to US$400 million [m] by 2007.

Several improvements are planned for Myspace.com to make it "stickier," Murdoch said. This week the site will begin offering free video downloads. The company is also developing instant messaging technology, and voice capability is planned, he said.

Myspace.com has about 47 million users, representing a gold mine of data for targeted advertising, according to Murdoch. The site is growing by about one million users per week, he said.

Myspace.com will not develop into a traditional portal, centered on organizing content for users, Murdoch said. Rather, his company is bullish on building community, or "social networking," sites, where users build connections to friends, colleagues and their preferred content. "No one has done that before," he claimed.

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