News Corp.’s 4Q overall results fine: net up to $890 million, or 28 cents, from $852 million, or 27 cents, operating inc up 18% to $4.45 billion, revs up 8.6 per cent to $7.37 billion. News still doesn’t break out Fox Interactive Media as a stand-alone, lumping it in the “other” category along with billboards, rugby leagues, etc. Rupert makes up for it by touting MySpace and FIM at first opportunity: FIM hit $550M revenue and squeaked out a $10M profit. Next year he projects MySpace revs at $800M, and FIM at more than $1 billion with a 20% profit margin. But the 07 numbers, at least, are below expectations.
First, MySpace appears to be growing much more slowly than most people think. Based on Murdoch’s ’08 projections, let’s assume MySpace represents 80% of FIM’s revenue. That would mean $440 million of revenue this year. In December Murdoch told me MySpace was generating $30 million a month, or a $360 million run rate. This means the company has only grown about 20% in the last six months (nice but hardly super-charged). A positive note is that the $900 million, 3-year Google deal hasn’t fully kicked in for MySpace/FIM’s 07 results, so there’s upside there. Chernin expects half of FIM’s growth to come from Google deal next year, and the rest from improved ad sales. Time to get to work, Mike Barrett.
Second: The $600M deal for MySpace was genius, but the $600M spent on IGN the same year seems less and less impressive: It’s going to account for less than 20% of FIM’s revenues (remember that FIM also includes FoxSports and Photobucket).