The move triples News Corp.'s reach among U.S. Internet users and makes it a player in the online social-networking market.
News Corp. on Monday said it has agreed to acquire Intermix Media Inc., which owns more than 30 e-commerce and media websites, for $580 million in cash, tripling News Corp.'s reach among U.S. Internet users and making it a player in the online social-networking market.
In a separate deal, Intermix announced on Monday that it has acquired the 47 percent of social networking site MySpace.com that it didn't already own.
In the News Corp. agreement, the Los Angeles based media giant would pay $12 per common share of Intermix stock, or about $580 million. The transaction is expected to close in the fourth quarter, pending approval of Intermix stockholders.
MySpace.com and Intermix's other sites would become a part of the acquiring company's newly formed Fox Interactive Media unit, led by Ross Levinsohn. Intermix chief executive Richard Rosenblatt and MySpace chief executive Chris DeWolfe would continue in their roles under Levinsohn.
"Intermix's brands, such as MySpace.com, are some of the web's hottest properties and resonate with the same audiences that are most attracted to Fox's news, sports and entertainment offerings," Rupert Murdoch, chairman and chief executive of News Corp., said in a statement. "We see a great opportunity to combine the popularity of Intermix's sites, particularly MySpace, with our existing online assets to provide a richer experience for today's Internet users."
The acquisition would boost News Corp.'s U.S. web traffic to more than 45 million unique monthly users, the company said. Intermix's network of sites, which include entertainment, humor, gaming and social networking, attract more than 27 million unique monthly users.
"With the acquisition of Intermix Media, News Corp. is more than tripling its reach among U.S. Internet users," Erin Hunter, senior vice president of Internet-consulting firm ComScore Networks, said in a research note. "By adding MySpace to their portfolio, News Corp. has now positioned itself as a market leader in the social-networking arena, as well as increasing its exposure to the teenage market.”
MySpace, which launched less than two years ago, is the fifth-ranked web domain in terms of page views, according to ComScore. The site, which targets teens and young adults, offers a variety of services, including blogging, instant messaging, e-mail, music, photo galleries, classified listings and chat rooms.
The number of unique visitors to MySpace soared 1,400 percent from June 2004 to June 2005 to 17.7 million from 1.2 million, according to ComScore. The number of visitors to News Corp. Online, on the other hand, fell 7 percent during the same period to 11.9 million from 12.8 million.
Other popular Intermix properties include Grab.com, a gaming and entertainment site.
In a related transaction, News Corp. said it had entered into a voting agreement with VantagePoint Venture Partners, the largest stockholder of Intermix. The agreement provides that VantagePoint would vote its shares, representing 22.4 percent of the outstanding shares of Intermix, in favor of the transaction.
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