Ad revenue was flat and earnings were down at News Corp.'s Fox Interactive Media (FIM) unit, as the company reported its quarterly results.
Earnings at FIM were about $7 million, much lower than the year-ago period. That was partly the result of higher costs at MySpace, where News Corp. spent money to grow the site's audience, expand internationally, and launch MySpace Music.
Chairman Rupert Murdoch told investors MySpace Music and MySpace Video offer strong opportunities to boost paid content and sponsorship revenue.
"After five years, MySpace still leads the social networking category in the U.S. and has become a substantial business we believe will continue to grow," he said.
Murdoch also expressed bullishness about the long-term resilience of display advertising, which has not performed well of late for AOL, Yahoo, and other online media sellers. The trouble with display advertising, he said, is the "almost infinite increase in inventory," which can be addressed through better targeting.
"There's constant downward pressure on the rates you can get," he said. "We have to find new ways to monetize our huge audiences. Being more data driven is good and will be increasingly important."
Commanding inventory representing hard-to-reach audiences is also a plus. Murdoch said The Wall Street Journal is on track to sell $125 million in online advertising by the end of the current fiscal year, which wraps up in June.
The mixed results for interactive came as News Corp. reported its first loss in more than three years on major revenue declines in its television and print businesses. News Corp. took a charge of $8.4 billion to reflect the lower value of its assets, and the company lowered its guidance for full-year 2009.
Murdoch chalked up the abysmal performance to "the worst global economic crisis we've witnessed since News Corp. was established more than 50 years ago."
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