Murdoch Looks Back at MySpace Acquisition

SAN FRANCISCO (AP) – News Corp. Chief Executive Rupert Murdoch said Wednesday he had no idea when he bought online hangout two years ago how explosive social networks would become.

Murdoch, a stalwart of traditional media, marveled at the $580 million acquisition and called himself a “trainee” still trying to embrace the Internet during a talk at the Web 2.0 Summit in San Francisco.

The three-day conference, which ends Friday, is focused on social networking startups and other companies dedicated to creating new ways to communicate using the Internet.

“We hoped it would do very well, but we never imagined it would do this well,” Murdoch said at the conference, sitting on a couch in a packed hotel ballroom next to Chris DeWolfe, MySpace co-founder and CEO, during a question-and-answer talk.

DeWolfe said during the talk that he and co-founder Tom Anderson have agreed to new two-year contracts to stay with the company.

Murdoch's talk on social networking sites came amid intensifying interest from venture capitalists to tech giants like Microsoft Corp. and Hewlett-Packard Co. in so-called Web 2.0 technologies.

Since Murdoch added MySpace to his media empire in 2005, the number of registered users on the site has more than doubled, from 90 million to 188 million. MySpace attracts substantially more traffic than rival Facebook, but is facing increasing competition.

A year after the acquisition, MySpace secured about $900 million in guaranteed shared advertising revenues over three years from Google Inc. by making the online search leader the site's exclusive search provider.

This week, MySpace made a series of announcements signaling the expanding scope of the Web site, including a deal with eBay Inc.'s Skype division to allow free member-to-member voice calls over the Internet and one with Sony BMG Music Entertainment to allow users to post artist videos and music on the site.

It's also a time of significant expansion for News Corp., which agreed in July to buy Wall Street Journal publisher Dow Jones & Co. for $5.6 billion, a deal that's expected to close by the end of December.

This week, Murdoch's Fox broadcast network launched its long-awaited new business news cable channel to rival GE's highly profitable CNBC network.

Murdoch declined to talk in much detail about either topic, sticking to his refrain that he hopes to add more general interest news to the Journal and continuing his derision of CNBC, saying the channel will struggle to compete with the Fox Business Network.