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Summary:

Rupert Murdoch had planned to spend $2 billion on Internet related acquisitions. With today’s $373 million acquisition of EasyNet, and $1.2 billion buying up properties like IGN and MySpace, he has already spent about $1.57 billion. So what’s next? Chances are that the next strike would […]

Rupert Murdoch had planned to spend $2 billion on Internet related acquisitions. With today’s $373 million acquisition of EasyNet, and $1.2 billion buying up properties like IGN and MySpace, he has already spent about $1.57 billion. So what’s next? Chances are that the next strike would be on a VoIP player. Informed sources say that News Corp is talking to pretty much every one in the VoIP space.

I have heard very loud whispers that Michael Robertson’s SIPphone is on News Corp’s radar. SIPphone, by the way is the company behind the ultrafine SIP-soft client, Gizmo Project, which has become a favorite with the Mac users. VoIP industry insiders indicate that the two parties have had advanced level conversations. No deal is in place, and no one knows what will be the price.

But what could be the price for a deal like that? Somewhere between $25-$50 million at the very least. SIPphone is said to have 250,000 users and if you used the $200-per-actual-user price EBay paid for Skype, that works out to about $50 million. All this could just be loud whispers, and nothing more than that. No response really from News Corp’s PR department to my queries. I am still waiting to hear back from Michael Robertson.

There has been a lot of talk about what News Corp will do next, promptly in part by a fantastic profile of the wily old fox in the latest issue of Fortune magazine. Murdoch wants to “get younger fast and to get audience fast,” the magazine says. And most of its recent purchases are along those lines.

The second prong is to add web features, like video search, instant messaging, and Internet calling—or VOIP—that will theoretically differentiate his sites (though the competition is developing the same stuff). Murdoch has told Wall Street that he’ll spend up to $2 billion on Internet acquisitions, so he’s got about $700 million to go.

Mark Pincus, founder of Tribe.net says that if he was Rupert Murdoch, he would buy Craigslist. Forget everything else. I am not so sure. Murdoch has publicly stated that he is interested in getting search capabilities and having a VoIP play. Fortune says News Corp, might have looked at a tiny search-engine, Clusty. The there were those rumors about Blinkx, and Skype.

Strategically buying SIPphone would make sense, and here is why:

  • SIPphone’s Gizmo Project is like Skype, only cheaper and standards based.
  • The Gizmo Project soft clients will be a perfect way to marry the IGN Gamer and MySpace audiences to PC-based VoIP.
  • At the University of California at San Diego (UCSD) SIPphone did a big pilot project that let all students talk to each other for free.
  • Imagine replicating that on many other campuses for free, and Murdoch’s desire to get “younger” could become more real than his “dyed” hair.
  • Did I mention it is not going to cost billions to buy SIPphone? Heck its not even going to cost tens of millions.
  • Works with Google Talk
  • SIPphone and MySpace were working closely to get some sort of Voice-features into the fast growing social network to add more stickiness to the community.

News Corp has plans to announce its VoIP plans soon, and we shall find out! Still, if it happens, then this could be a fantastic outcome for Michael, who is focusing all his energies these days (it seems) on the digital music business. He recently hired DVD Jon for his new MP3Tunes project. The cash from SIPphone transaction could come in handy. Tom Keating says he is hearing about a mega merger in the VoIP space, likely to be announced next week at the Internet Telephony conference in LA. That’s Michael’s backyard.

Additional Reading:

Why Murdoch Bought MySpace
Murdoch, WiMax & The Two Way Web
Inherent Truths & The Value of Community

  1. PaidContent.org Saturday, October 22, 2005

    SIPphone on Murdochs Radar?

    : News Corp might be interested in Michael Robertson’s SIPphone, the VOIP service, according to Om. Robertson is the founder of MP3.com, and a bunch of other things after that. The two companies have had advanced level conversations, but no…

  2. I have been disappointed in the progress on the Gizmo Project. It came out somewhat interesting, but has not really improved.

  3. That’s classic Michael … he starts a project, gets it going, and then moves on to something else. i guess being focussed on a single project is not his strength. perhaps that’s why you and others find gizmo project stuck in the second gear. i am pretty certain with enough resources, this could be a mega play.

  4. Who even cares about Gizmo’s user base…it is the client and backend that matters. Gizmo + MySpace would be such a massive deal. 50 mm active users with MySpace with a new IM network + voice would make the network almost as big as AIM in the US. Plus when you pull out the MySpace users from AIM (aim is very lame), you would have a network maybe even bigger than AIM.

    Plus, Gizmo does Mac, PC and Linux. No one, not G Talk, AIM, not MSN, not AOL have all these platforms.

    Anyway, I would be stoked to see myspace + gizmo.

  5. sipphone (mickey mouse) and newscorp ( the giant) in partnership with a mouse who cannot even roar? never….
    sipphone support and staff act like primadonnas,they think the world owes them a living…..no way…jose
    chances of newscorp acquiring an operation like sipphone is slim or none….newscorp owned telecom companies 1000x larger than sipphone, and decided to let it go.

  6. sipphone/gizmo project would definitely be a cool fit here. i’d love to have a tool to use with myspace. i’ve used gizmo a bit and always had a good experience, but never had to deal with support.

    i must say that there’s a lot of speculation in this article. how many of these rumors end up being true anyway?

  7. Dude, as a bigtime Gizmo user, I love that thing. I don’t use MySpace but everyone I know does. Like an earlier post, I would think the two together would give AOL a real run for its money. Plus MySpace is all about dating, so P2P phone would make that place the biggest friggin hook-up service ever. I guess I better get a MySpace page going.

  8. Om Malik on Broadband : » SIPphone Gets VC Cash Tuesday, February 14, 2006

    [...] “There is no doubt that the price of voice calls is headed towards near zero, and companies like us need to make money off premium services and features that consumers are willing to pay for,” says Robertson. [ Read: The great VoIP implosion.] SIPphone is going to announce a new “premium offering” later this week. Robertson, who previously had started MP3.com, says he is working on creating a private label business for SIPphone as well, and is already powering a low-cost calling service called iPhox. SIPphone was rumored to be in talks with News Corp, for adding voice functionality to MySpace.com. There were rumors of a $50 million buyout offer from Rupert Murdoch. While those talks haven’t gone anywhere, this new round of funding will give SIPphone the runway it needs to get market traction. [...]

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