Has Rupert Murdoch pulled back on his FY 08 revenue predictions for News Corp.’s (NWS) Internet unit? In August Murdoch said he’d be “surprised” if revenues at his Fox Interactive Media group (primarily MySpace, but also IGN, Fox Sports and Photobucket “do not exceed $1 billion” in News Corp.’s next fiscal year ending June 2008). But according to Valleywag’s Owen Thomas’s account of a dinner interview at the Web 2.0 conference, Murdoch appeared to chop that number by at least 20%:
Murdoch says that Fox Interactive Media, the unit of which MySpace is the biggest part, could cross $750 to $800 million in revenues next year. And there’s a hint, in the back-and-forth, that the rumoured earnout provision in DeWolfe and Anderson’s contract might be tied to MySpace and the rest of FIM hitting a target of $1 billion in revenues.
We’ve asked FIM and News Corp. for clarification, but it looks as if Murdoch is now setting two targets for FIM — the first at $750 to $800 million, and then a $1 billion stretch goal. This would make sense: As we reported last month, FIM missed its July and August sales goals, and we understand that its sales team has always felt that the $1B goal was unattainable.
On the other hand, last month some FIM sources insisted that the unit was on track to hit $1B, and yesterday’s setting would be an odd place to (intentionally) reduce guidance. While the interview, conducted by Web 2.0 organiser John Battelle, was held in the ballroom of the Palace Hotel, it wasn’t open to the public, and the event wasn’t webcast. And in contrast to the August earnings call, when Murdoch was reading from a script, this event was off-the-cuff. So perhaps Murdoch was just being unintentionally straightforward.
Update: Still no word from News Corp or FIM. But Reuters’ coverage of the same event has a different take: It quotes Murdoch as saying that MySpace revenue may be about $750M in FY 08. That’s obviously much less dramatic than cutting the overall FIM goal to $750M or $800M. Still, even that number represnets a climb-down from Murdoch’s August forecast, where he predicted that MySpace would come in around $800 million.