News Corp. buys online game business for $650 million
Thursday, September 8th 2005, 10:51 am
By: News On 6
NEW YORK (AP) _ Rupert Murdoch's News Corp. made its latest acquisition in the Internet sector Thursday, agreeing to pay $650 million in cash for online video-game company IGN Entertainment Inc.
The purchase comes on the heels of News Corp.'s $580 million cash deal to acquire Intermix Media Inc., owner of the popular social networking site, MySpace.com.
Murdoch told investors in a conference call last month that he intends to make a strong push in building up his company's Internet presence, saying online businesses would be a ``major part'' of the future growth of his media conglomerate, which includes the Fox broadcast network, the Twentieth Century Fox movie studios and DirecTV.
The acquisition of IGN, which is based in the San Francisco Bay Area, was made by News Corp.'s newly formed online unit, Fox Interactive Media. In addition to MySpace, the unit has also purchased the college sports online business, Scout Media.
IGN is a network of online video games and game-related Web sites that includes IGN.com, GameSpy, GameSpy Arena, FilePlanet, TeamXbox, 3D Gamers, Direct2Drive, and GameStats.com. IGN also owns two movie-related sites, IGN FilmForce and Rotten Tomatoes, and a male lifestyle site, AskMen.com.
With the addition of IGN, News Corp. said in a statement that its U.S. Web traffic will increase to nearly 70 million unique monthly users.
Murdoch also said last month he was close to acquiring an online search company, but so far no such deal has emerged. Richard Greenfield, an analyst with Fulcrum Global Partners, said in a note to investors Thursday that he believed a search engine could help tie News Corp.'s Internet holdings together.
However, Greenfield also noted that the question for News Corp. now was what overarching vision the company would have for its Internet properties and how quickly it can integrate them.
The transaction is expected to close in the fourth quarter of 2005, subject to regulatory approvals. IGN's chief executive officer, Mark Jung, will continue in his role following the acquisition.