Saturday, March 18, 2006

Actually, It's Rupert's Third Try

Rupert Murdoch, the man behind News Corporation, has been both praised and ridiculed in the press for propelling his media empire onto the Internet with the acquisition of MySpace. Newsweek called it "Murdoch's New Groove" and the Techdirt headline mockingly shouted "All Hail Lord Murdoch of the Internet" as if to say he just discovered the Internet, and he's already declared himself king.

Regardless of whether you think News Corp's recent MySpace purchase was brilliant or idiotic, you have to hand it to Rupert Murdoch for his persistence. This is at least his third attempt to figure out what a media company should do online.

He was among the very earliest online pioneers with his 1994 purchase of Delphi Internet Services. That foray did not end well (Delphi eventually faded into obscurity), but Murdoch was obviously paying careful attention to the Internet before most of us even had an email address.

That first failure did not deter him. In early 2000, he purchased a significant equity stake in UpMyStreet, which is still one of the most clever local search sites online (unfortunately, it only works in the United Kingdom). UpMyStreet got caught by the trappings of the bubble and was out of cash by 2003. A cash-flow generating young upstart called USwitch.com acquired the assets and has operated UpMyStreet profitably ever since. The US media giant Scripps took notice and bought Uswitch for $366 million last week. Maybe Murdoch was, perhaps, just a bit too early.

Much more recently, News Corp. ventured back online with the purchase of Scout, a collection of online and offline local sports media properties, and MySpace. Many believe MySpace will fade just as quickly as it ascended from an idea to a top-10 Internet property. Though it is unclear whether Murdoch will ultimately regret his recent purchases, it is crystal clear that he has been thinking about and exploring Internet media for quite some time.

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