As foreshadowed in this blog a few weeks ago News Corporation has started talking with Yahoo about a possible tie up in response to the Microsoft’s big bid for the company.
News Corporation owner, Rupert Murdoch has been fashionably late to the online media as he waited for the business models to emerge out of the dot.com wreck and it starting to pay off. He got MySpace for a bargain and struck a massive advertising deal with Google to generate an impressive revenue stream from the collection of online proprieties from MySpace to Newspaper and Television websites around the world.
There are big pluses for both companies in such a tie-up between the two companies. While News Corporation can not afford an entire takeover bid, a merger makes much more sense for the two companies. Yahoo’s business model loves content, which News owns a wide spectrum of proprieties. For consumers it is also a far more completing deal.
It will also leave the competitive and growing search market open to three big players to battle it out and this combination will be much better for consumers as News Corporation / Yahoo / MySpace will prove a much stronger match for Google as they will be fighting the battle for eyeballs on two fronts.
With News Corporations other existing sites traditional media websites they can be used or integrated into Yahoo to push more users to Yahoo’s key services. The portal space will be a lot more interesting. A Microsoft / Yahoo combination will only signal a consolation of a growing sector in need of good competition to keep the pace of innovation going.
This deal also symbolises an ironic twist where instead of creating a wide range of varied media outlets, the Internet has created a new breed of mass media outlets. Yahoo, Google and MSN while offer a wide of range of choice than the traditional forms of media, they still are dependent on mass media concepts to make their business models work. It really only after these gateways and brands do you get the wider range of independent and varied websites that the Internet promises its users.
In Australia, it may also mean an even stranger combination of ownership combinations than the Microsoft – Yahoo merger. NineMSN, the Microsoft Australian site is likely to be part owned by Rupert’s renegade son that has created his own company and is buying the second largest television network in Australia by audience share. Yahoo7, Yahoo’s Australian site in partnership with the largest television network may end up being half owned by News Corporation which dominates the countries print media plus in conjunction with the parent company of PBL that owns the monopolistic Pay Television provider Foxtel.
Confused yet? In summary the Murdoch family as a whole will end up with a fairly cosy diversified portfolio of Australian media assets leaving few other independent players in the marketplace.