News Corp.'s (NYSE: NWS) Rupert Murdoch has spent his career making money from audiences' eyeballs, whether through newspapers or television. Now he's doing the same on the Internet.
It certainly helps that he owns one of the hottest and most trafficked sites on the Web: MySpace. The latest numbers indicate that the social-networking site has about 78 million registered users. The site, in fact, attracts about 38.4 million visitors per month.
For a media mogul, that's mouthwatering. So News Corp. is doing what any smart media company enjoys: convergence. The company is allowing its users to download episodes of its popular series 24 for $1.99 a pop.
While they're at it, why not take a page from Disney's (NYSE: DIS) playbook and add a promotion for a major sponsor? Voila: Burger King will offer two free downloads for MySpace users.
Burger King certainly needs to add some hipness to its tired brand, and this deal may help generate some buzz for its upcoming IPO. That would help, especially since the media has been mostly negative on the IPO over the past few weeks. The pushback on the IPO has involved a variety of factors: the huge cash-outs of the private equity investors prior to the IPO; the departure of the CEO; and most importantly, the lack of a clear growth strategy. A sponsorship of this sort could only help at this point.
For a company the size of News Corp., the 24 download program shouldn't move the needle much. It's just one of many possible experiments. It might next move toward larger ambitions like a music service, such as Apple's (Nasdaq: AAPL) iTunes -- where episodes of 24 are also newly available for download -- or even a proprietary search engine. After all, more than 8% of Google's traffic is attributed to MySpace. Why not cash in on this traffic itself?
But keep in mind that building a search engine is no easy feat. Why not buy one -- perhaps a lesser player like LookSmart (Nasdaq: LOOK)? Over the years, the company has spent hundreds of millions building a sophisticated search infrastructure. It also has its own Furl technology, which allows for tagging, and LookSmart has more than 180 vertical sites. Given the diverse nature of MySpace, this could be a nice fit.
Essentially, MySpace is an ominous threat to the biggies like Yahoo! (Nasdaq: YHOO), Google (Nasdaq: GOOG), and Microsoft (Nasdaq: MSFT). You can expect that threat to be realized over the rest of the year -- kind of like an intense season of 24.
Microsoft is a selection of our
Motley Fool Inside Value
newsletter service.
Want to sweeten your portfolio without breaking the bank? Find more market-beating bargain stocks with a free
30-day guest pass
.
Fool contributor
Tom Taulli
does not own shares mentioned in this article.
Terms & Conditions
RSS Headlines
Fool UK