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| Media moguls Twitter over slump |
| Bloomberg / Idaho Jul 13, 2009, 00:03 IST |
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Media moguls Rupert Murdoch and Howard Stringer attend the annual Allen & Co media conference in Sun Valley, Idaho, to kick the tires on new businesses. This year, they didn’t find much.
Murdoch, chairman and chief executive officer of News Corp, and Stringer, his counterpart at Tokyo-based Sony Corp, said separately at the conference this week that they won’t bid on Twitter Inc, the Web messaging service, signaling Internet businesses have become less attractive to media companies stung by the recession.
That’s a departure from recent retreats sponsored by the New York-based investment bank. In 2007, CBS Corp CEO Leslie Moonves held talks that led to the $1.7 billion purchase of CNet Networks, the online technology news company. Sling Media founder Blake Krikorian said he started discussions in Sun Valley that led EchoStar Corp to pay $380 million for his company, which lets users watch their home TV services online.
“It’s not a club I’m looking to join,” Stringer, 67, said in an interview. “A lot of people are doing well making very little money.”
Slumping advertising sales are overshadowing the usual interest traditional media companies show in acquisitions, David Winters, CEO of Wintergreen Advisers LLC, in Mountain Lakes, New Jersey, said at the conference. The company managed $1.03 billion as of June 30, according to data compiled by Bloomberg.
Murdoch, 78, and Stringer told reporters in Sun Valley this week they are interested in companies with profit and growth potential.
“I don’t see an end to the downturn, and I can’t predict when we’ll start to see a rebound,” Murdoch said in an interview.
New York-based News Corp, owner of the Fox network, Wall Street Journal, cable channels, film studios and satellite broadcasting interests, will hold on to its $6.05 billion in cash until the recession ends, Murdoch said.
News Corp fell 6 cents to $8.17 on Saturday in Nasdaq Stock Market trading. The Class A shares have declined 10 percent this year. Sony’s US traded shares lost 60 cents to $23.85 on the New York Stock Exchange and have gained 9.1 per cent.
Traditional media companies and newer Internet businesses face a similar dilemma, trying to get online users to pay for their products, cable billionaire John Malone told reporters at the conference.
Television, film and publishing companies must find a way to charge Internet users for content they provide, said Malone, 67, the chairman of Liberty Media Corp. Some are running out of time as they struggle to generate online sales, he said.
Internet companies including San Francisco-based Twitter and Google Inc’s YouTube will need to sell subscriptions to make money, Malone said.
Without new pay models, the Internet will drain profits at media conglomerates as it has at newspapers, said Malone, who runs Liberty Media from Englewood, Colorado. Companies must find ways to be compensated, just as cable operators convinced consumers to pay for TV after decades of free broadcasts.
Mountain View, California-based Google is looking for acquisitions, CEO Eric Schmidt said in an interview with Bloomberg television.
“We have talked a lot with Twitter,” Schmidt said at a press conference in Sun Valley.
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