Rupert Murdoch is not always known for his savvy when it comes to new media.
MySpace, once the hippest place in the galaxy for teens to hang out online, could have been the Facebook for millennials, but then Murdoch’s News Corp. got its hands on the fast-growing social media pioneer and ran it nearly into oblivion.
Now, his flagship company is taking aim at Move, a company based in Silicon Valley but whose major facilities are in Westlake Village.
Move is a pioneer in online real estate sales and services in large part because it has an exclusive arrangement with the National Association of Realtors to run its Realtor.com website and gets virtually all of group’s Multiple Listing Service, or MLS, listings. The price for that exclusivity is a hefty $21 per share or $950 million — the cash offer Murdoch made for the firm.
News Corp. says it will combine Move with its 62-percent owned Real Estate Australia Group. It will own 80 percent of the merged company with REA owning 20 percent when the dust settles.
But there’s a catch. Despite the lucrative deal with the Realtors, Move has not generated much in profits — it earned just $500,000 on sales of about $220 million last year.
Move’s valuation dims in comparison with its two online competitors, Zillow and Trulia. The two of them are hoping to merge in a $2.9 billion deal that would create an online real estate listing juggernaut, but the proposed transaction has drawn the attention of antitrust regulators.
Murdoch’s News Corp., which also includes Dow Jones & Co., the New York Post, his scandal-wracked British newspapers and his legacy Australian media properties, has been caught up in the same conundrum that afflicts print media worldwide. It can’t figure out if print, online or some hybrid of the two will be a viable path to revenue growth.
In case you are not a financial news junkie, the glamorous properties of Murdoch’s far-flung empire were spun off last year as 21st Century Fox. They include the Fox broadcast channels, the film studio, sports networks, TV stations and satellite broadcaster BSkyB.
News Corp. CEO Robert Thomson heralded the Move purchase saying, “We certainly expect this deal to amount to far more than the sum of the parts.”
But buying the weak No. 3 in real estate listings and hoping it somehow manages to bolster the bottom lines of a weakening print empire seems a bit of a stretch.
When he paid $580 million for then-fast-growing MySpace back in 2005, Murdoch heralded the deal as a doorway to move Fox-branded products throughout the digital universe. That never happened, revenue growth stalled and Facebook overtook its former larger rival.
In 2011, MySpace was sold for an estimated $35 million to a private firm. It was relaunched with some modest success a little over a year ago.
It’s a bit too early to say whether News Corp.’s acquisition of Move will turn out to be as savvy as some of Murdoch’s other moves or come up a cropper like the MySpace buy.
Move does have one advantage — its affiliation with the National Association of Realtors gives it a natural niche and a lot of attention from real estate pros who are personally invested in keeping Move around as their go-to place for MLS listings.
But that strength is also a weakness for consumers who are looking for data-rich places to perform price discovery — places that are a bit edgy and that aren’t afraid to call a bargain a bargain or an overpriced listing overpriced.
The bottom line is that assuming that Move’s revenue stream is a lock or that its content will easily generate revenue for other News Corp. websites without constant reinvention and massive capital outlays is probably a mistake.
• Contact Henry Dubroff at firstname.lastname@example.org.