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Web 3.0 & News Corp (Part 2)

Posted on Tuesday, Sep 11th 2007

Vertical Strategy

News Corp. is present in some of the most promising and rapidly growing verticals in the online arena. The Company delivers a platform of integrated sites spanning social networking, entertainment, lifestyle, games, sports and information. With its recent acquisition of Dow Jones, it will also be present in the key vertical of Business and Finance through WSJ and Dow Jones. I really like News Corp’s verticalization strategy. We will discuss the Company’s offerings in the different verticals in the following paragraphs.

Classified Listings
New Corp. through its various newspaper sites is present in the online classifieds segment. The newspapers have online listing for Jobs, Real Estate, Autos and Dating / Match Making. However, as we discussed before, it is a well-known phenomenon that classified advertising is moving online, and News Corp. fully recognizes that. So what are they doing to move with this trend?

Auto
News Corp. has an auto site dedicated to Australia. CARSguide.com.au is Australia’s fastest growing automotive site. If they want to play in the Auto segment, the Company should look at expanding its Online Auto segment to other countries as 71.9% of in-market respondents use the Internet to research automobile models that they plan to either purchase or lease and eMarketer estimates that in 2007, auto will account for $2.54 billion of the total online advertising.

Dating
Though, MySpace cannot be called a dating site it does allow users to network and have many of the features of a typical dating site, and is most certainly a venue for online “hook-ups”. Other than MySpace, News Corp. does not have a dedicated online matchmaking presence so far. One additional way to monetize MySpace would be to give it explicit dating functionality that is a subscription service.

Entertainment
Entertainment is a growing lifestyle segment and News Corp’s offerings in this segment include Fox.com, AmericanIdol.com, kSolo.com and Rotten Tomatoes. Through the above sites the Company has positioned itself well to take advantage of the growing demand for online information on music, movies, TV shows, Reality shows, Home entertainment, Karaoke service, etc.

Gaming
IGN Entertainment is focused on the videogame and entertainment segment. IGN’s network of videogame-related properties (IGN.com, GameSpy, FilePlanet, TeamXbox, 3D Gamers, Direct2Drive and others) make it the web’s number one videogame information company and attracts one of the largest concentrated audiences of young males on the Internet. News Corp. has built up an enviable portfolio of gaming sites.

Jobs
News corp. has two jobs related sites, Milkround, a career and jobs site for the graduates and Careerone.com.au, a job site in Australia. News Corp. could consider expanding its jobs offering to tap into the global opportunity.

Men
In the lifestyle segment News Corp. has AskMen.com, a men’s portal, designed to provide men with daily features on subject matter that interests them. According to HitWise, the AskMen.com is the most popular men’s site with 34.58% market share of all surfers interested in men’s lifestyle content.

Women
With 51.7% of Internet users being women and growing everyday, the absence of a site targeting them, however, is a hole in the News Corp. portfolio that needs to be plugged.

Music
The Company is present in the Music vertical through its social networking site MySpace. MySpace had started off with a focus on music but after the acquisition of the site by News Corp. it has broadened its scope to include videos, photos, etc. The Company through its partnership with Apple’s iTunes and Snocap provide music downloads. By and large, Music is not a very profitable vertical, so while it is a great traffic generation tool, I would say, News Corp pretty much has what it needs there, and doesn’t need further expansion.

Personal Finance
Personal Finance is an important vertical as 61% of the Internet users use the internet to research stocks or check their bank accounts and around 73% of the Internet users’ research sources for investments, mortgages and insurance, online. eMarketer expects the financial services sector to increase its online ad spending by 33.3% in 2007 to $2.4 billion and reach $3.52 billion by 2010, which makes the sector one of the largest advertisers online, and thus validates News Corp’s entry into the space through the acquisition of Dow Jones. News Corp. will go well beyond Personal Finance, and with this acquisition, will become the top player in the Business and Finance segment overall, if they play their cards right.

Photo-sharing
News Corp. acquisition of Photobucket in June 2007 was a strategic move to monetize its MySpace asset. This acquisition seals News Corp’s position in the Online Photo Sharing vertical. The only thing it may choose to do further is to enhance the “Commerce” capabilities around Photo Printing and Personalized Photo Merchandise, which have established large businesses for Kodak Gallery and Shutterfly.

Sports
News Corp. has a leading position in the sports vertical. Its popular sports site FoxSports.com was ranked second with over 13.6 million unique visitors in June 2007. News Corp. also owns two other sports sites 1) Scout.com, a network of more than 300 web sites that publish inside and exclusive content focusing on College, NFL, MLB, High School and other professional team sports and 2) WhatifSports.com, the internet’s foremost authority on simulation for MLB, NFL, NHL, NBA and college basketball. Clearly the group’s sports sites are focused on the most popular sports like Baseball, Hockey, Basketball, Football, etc. It could continue to expand into other sports.

Gaps in News Corp’s portfolio
News Corp. is sparingly present in the all-important Health segment. Though, AskMen.com has a health segment, but an out and out health site is what I found missing in the Company’s portfolio. Travel is another important category where the Company has no visible online presence except some classifieds on the various newspaper sites and some travel related articles, whereas online travel draws over 2% of the Internet traffic and approximately 24% of online advertising dollars and is a $78.8 billion industry. A stand-alone Real Estate site is also missing.

(To Be Continued)

[Part 1]

This segment is part 2 in the series : Web 3.0 & News Corp
1 2 3 4 5

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[…] Nishanth wrote an interesting post today onHere’s a quick excerptNew Corp. through its various newspaper sites is present in the online classifieds segment. The newspapers have online listing for Jobs, Real Estate, Autos and Dating / Match Making. However, as we discussed before, it is a well-known … […]

Matchmaking » Web 3.0 & News Corp (Part 2) Tuesday, September 25, 2007 at 6:46 AM PT