Allow me to preface this commentary by saying that News Corp.’s Rupert Murdoch and FIM’s Ross Levinsohn have done a very impressive job of acquiring a bunch of Internet companies to form the Fox Interactive Media empire.
MySpace, Scout, IGN, and as of today’s announcement, Newroo and kSolo. The empire now spans to include over 70 million uniques, with one of the crown jewels, MySpace looking like a contender to become one - if not the - largest property online.
That being said, while FIM today boasted that these acquisitions “demonstrate our commitment to empowering users with interesting tools that they can use to further enhance their online experience and online identity,” I think the company might be better off and pause a bit to see how they plan on integrating all of these elements.
After all, Yahoo! has been one of the kings of internet acquisitions and while their model has been to have everything under one brand, it has helped them offer Yahoo! users a fairly seamless experience.
What FIM probably will look at doing is employing a multiple brand strategy. While this works in many ways, it makes it hard for users to really experience something meaningful.
While today’s accouncement includes two companies that promote user-generated content, they only add to the integration dilemma the parent faces.
What exasperates matters is that this past week, FIM’s IGN’s division launched its own social networking section on the site, but instead of relying on sister division MySpace’s platform, IGN developed much of the site without the input of MySpace. If that is the case, it’s a strategic mistake.
Ultimately, it is not even what users or analysts think that matters. Let’s face it, part of Mr. Ruport’s rush online has been to satisfy shareholders, who have traded News Corp.’s shares in a tight range for a long time. If the stock is to break through that range, it will have to convince shareholders that the premium News Corp. has paid for some of these acquisitions is justified from a bottom line perspective.
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