News Corp buys IGN, strengthens position in online realm |
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Sat, 10 Sep 2005 00:35
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NEW YORK: Rupert Murdoch's News Corp. is buying Brisbane, California-based video gaming company IGN Entertainment Inc. for about $650 million in an all-cash deal. The company said this is line with its strategy to expand and consolidate its activities in the online entertainment domain.
The company had already contracted to buy Scout Media, an online sports company in August, and social networking site MySpace in July.
These acquisitions, analysts feel, will strengthen News Corp's position in the online advertising business, where search companies like Yahoo and Google have a near monopoly. The strategy may also wake up other media houses, who would want to cash in on the new business opportunity.
News Corp. said the three acquisitions will make it the fifth most-trafficked network on the Internet. It now expects to have nearly 70 million unique monthly users in the U.S.
The IGN Entertainment buy-out is expected to close in the fourth quarter. The company's chief executive Mark Jung is expected to retain his position as it becomes a part of the newly-formed Fox Interactive Media unit.
Murdoch had recently spelt out the company's Internet strategy, saying it has earmarked $2 billion for investments and acquisitions. He said: "We have gone a long way toward achieving two of our key strategic objectives in our efforts to become a leading and profitable Internet presence."
Private equity firm Great Hill Partners controls IGN Entertainment. It has sites with urls like TeamXbox.com, GameSpy.com (for gaming), RottenTomatoes.com (reviews) and AskMen.com (a male lifestyle network). Its revenue for the first half of 2005 more than doubled to $28.7 million while the net loss came down to $7.5 million from $11.6 million. It had plans for an IPO to raise $200 million, but says it is not pursuing.
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