In a "continuing reassessment of its overall Internet strategy," News Corp. said yesterday that it will "shutter its News Digital Media unit and transfer production of its Fox news and entertainment Web sites back to the parent TV networks," according to Matthew Doman of the HOLLYWOOD REPORTER. The move is "expected to cause the loss of as many as 200 jobs" in L.A. and N.Y., "saving Fox about" $35M annually in production and maintenance of its Web sites. FoxNews.com, FoxSports.com and Fox.com will now be produced by Fox News Channel, Fox Sports TV Group and the Fox Broadcasting Co., respectively. Jon Richmond, who has headed News Digital, said that "in the early days of Internet media companies, it was expected" that TV and online content would "compete with each other, but Fox now sees a 'strong symbiotic relationship' between Internet and broadcast content." Richmond: "The time is right to capitalize on that relationship by streamlining our sports, news and entertainment programming" (HOLLYWOOD REPORTER, 1/5). DAILY VARIETY's Marc Graser reports "transition" of control of the Web properties from News Digital to the TV nets is "expected to take up to six months, with about half" of News Digital's 450 L.A.-based employees "laid off during that time" (DAILY VARIETY, 1/5). But Richmond said that it "remains unclear how many" staffers on FoxNews.com, FoxSports.com and Fox.com will "be let go and how many will be offered jobs" at News Corp.'s broadcast division. Richmond: "We truly do not know what the numbers will be at the end of the day" (TheStandard.com, 1/4). News Corp. execs told the N.Y. TIMES that the News Digital's Chelsea office "would be closed within two months" (N.Y. TIMES, 1/5).
THE ANTI-CYBER SENTIMENT: BLOOMBERG NEWS reported News Corp. is "trying to reduce costs" at the Web sites because it "doesn't expect selling advertising on the sites to be very lucrative." News Corp. Deputy COO Lachlan Murdoch: "We don't have faith in stand-alone advertising models. You can put in the time and money to try to be the leader in sports (on the Internet), and at the end of the day you'd lose as much money as ESPN.com" (BLOOMBERG NEWS, 1/5).
WHAT HAPPENED? PA-based venture capital firm TL Ventures partner Guy Hoffman, on News Digital: "At the end of the day, I think of them as a latecomer who was underfunded and thought they could translate their success on television onto the Web, and there is little value to that. Those who say traditional content sites are done, they're baked, they're cooked, they're wrong. But there will only be a handful" (N.Y. TIMES, 1/5).
