ON NEWS CORP. CREATING "INTERNET UNIT"

BACK TO THE FUTURE

Another data-point to add to my recent post on "Broadband end-runs", on content companies taking steps for the new distribution realities of a truly wired and wireless broadband internet. 

News Corp., following the announcement by Viacom's CBSNews unit,  announced that it was creating a new "Internet Unit" for all its Fox media related interactive businesses. 

This press release though has a distinctly musty smell about it, hearkening back to a time almost a decade ago, when most media companies were trying to come up with an omnibus internet division to represent all of its traditional content businesses.  Time Warner's Pathfinder effort comes to mind in particular.

The company has made several concerted efforts to come up with an internet strategy over the last decade.  The UK's Guardian had an interesting piece back in February, going through the evolution, (courtesy blueverticalstudio)...an excerpt:

News that media baron Rupert Murdoch has convened an internet strategy meeting for his 50 top executives this week has a quaintly nostalgic feel about it. Indeed if you Google the term "Rupert Murdoch internet strategy", you can read in blue and white the chaos the web has caused at News Corp in the past: Rupert discovers the internet (Wired, March 2000); Rupert Murdoch's internet retreat (the Industry Standard, November 2000). This has included a $300m investment in the now defunct eVentures here, a $700m investment in medical web Healtheon there, and a swift retrenchment and a rubbishing of internet values elsewhere.

Whatever Murdoch is expecting his executives to come up with this week, he will want a departure from the "hokey cokey" strategy for the web - in, out, shake it all about. There are two ways of interpreting the pan-national call for a web rethink which somehow leaked into the Financial Times on Tuesday. One is that Rupert Murdoch really is rethinking the web - again. The other is that he wants it to appear that he is rethinking the web, so that those far-sighted individuals in the investment banking and fund management community stay off his back.

This week's announcement follows Rupert Murdoch's rather bold speech to his peers back in April, regarding the realities of the Internet.  I had a bit of a tongue in cheek take on the speech back then if you're interested.

This effort to back into an internet strategy with a "one size fits all" internet unit will be interesting to watch.  Given the content assets in Fox Media, Fox Interactive Media (FIM) will likely be an attractive destination online.  The question though is how its business model will impact the business models of Fox's off-line, traditional assets.  Otherwise, there's always time for another internet strategy retreat.