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Summary:

News Corp. billionaire Rupert Murdoch doesn’t like to admit failure, but he appears to have conceded defeat in his attempts to build a competitor to Google News. Project Alesia, designed to aggregate news and distribute it via the iPad and other platforms, has reportedly been axed.

Rupert Murdoch

News Corp. founder Rupert Murdoch has likely never acknowledged (at least not publicly) that he has failed at something, particularly when it involves a market worth billions of dollars, but he appears to have conceded defeat in his attempt to build a competitor to Google News. According to several news reports today, an ambitious attempt to bundle News Corp. content along with that from other publishers and sell it as a subscription package — a venture code-named Project Alesia — has been axed, just weeks before it was supposed to launch.

The project, which was named (by Rupert’s son James, with typical Murdoch hubris) after a famous military campaign by Julius Caesar, had reportedly already sucked up about $30 million in funding, and had a staff of more than 100. The venture was being led by Ian Clark, former managing director of thelondonpaper, and a News Corp. digital specialist named Johnny Kaldor. According to one report, it had already booked $1.5 million worth of advertising in other publications to promote the launch, which was expected within a matter of weeks.

The project was designed to aggregate content from all of News Corp.’s various properties — including The Wall Street Journal, The Times, The Sunday Times, The Sun and News of the World — and distribute it via the web, mobile devices and the iPad. It was also intended to include content from other publishers and broadcasters as well, and those partnerships appear to have been part of the problem leading to its demise. According to sources who spoke to The Hollywood Reporter, some of the partners were not ready technologically or administratively, while others apparently preferred to work on their own mobile and iPad strategies rather than bending to Murdoch’s will. (Not wanting to partner with Rupert Murdoch? Imagine that!)

A report by the industry news site MediaWeek, meanwhile, said there were also concerns about the runaway costs of the venture — which isn’t surprising, given that spending $30 million over a year is a rather impressive amount, and the site hadn’t even launched yet. The project is expected to shed most of the 80 or so freelancers that were working on the launch, and will try to find room for the rest of the staff at some of Murdoch’s other properties. Now MySpace has another heavily subsidized News Corp. failure to keep it company, and the digital savvy of the company’s octogenarian founder (not to mention his senior executives) takes another spear to the flank.

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Post and thumbnail photos courtesy of Flickr user World Economic Forum

  1. Misleading title….

    I don’t see where Rupert admitted anything. All you have are rumuors from some anonymous source that they are pausing the project. Even if true, it wouldn’t be the same as what you were asserting.

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    1. Thanks, Tim — obviously I’m extrapolating, but the Murdoch organization has made it clear on a number of occasions that they saw this project as competition for Google, and according to multiple sources it has been shut down completely.

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  2. “About $30 million in funding, and had a staff of more than 100.”

    I’m curious. Can anyone reading this estimate how much money and how many people Google used to get Google News started?

    The amount seems too high to me.

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  3. I suppose Google doesn’t invest in any money-losing operations in it’s market development efforts? This piece just smacks of disdain for Murdoch and Fox News. btw, did you see the Bloomberg piece on Google tax avoidance schemes this AM? http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

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  4. Well, not a surprising outcome, though the particulars are impressive. I could not launch a website for half as much!

    Apologists can say what they will. I’ll stick to my long-held belief that Rupert is dead last on the list of media moguls that “get” the web. It’s a hell of a feat to be dumber than TimeWarner, but Rupert does it with ease. His instincts are exactly backwards, like an Australian George Costanza.

    So, The New York Times, how’s the paywall project coming along. “Sometime next year” starts in about 10 weeks…

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  5. Rupert Murdoch is a wrinkled old turd, a dinosaur like the rest of the conservative movement. His son, James, never advanced from being a sperm.

    The only thing left is for the Fox Noise groupies to bitch that the truth about Murdoch and his shabby “Internets” operation going down somehow isn’t real.

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  6. @Bill, it does seem considerably high to me as well. Google News was started as one of the 20% projects so it’s difficult to put an exact price on what it cost to get started, however it’s simply an aggregator so not a huge amount of man power once the initial set up is complete.

    A subscription model to news corp’s products would probably have a decent market, although Murdoch will need to look at completing the project at a far cheaper cost if he wants to make it worthwhile.

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    1. @compareaholic, The smart way to do these projects is to throw a modest sum at a bunch of hungry young types in a skunk-works operatation. I’d say a couple of million would have been ample.

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  7. At his age, I think it’s commun sense that he can’t compete with Google. The conclusion can be seen by anyone, he doesn’t have to admit it.

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  8. [...] example, the media mogul spent over a year and more than $30 million trying to build a competitor before finally killing it. He is also said to be close to putting a bullet in Myspace, which has been both losing traffic and [...]

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  9. [...] working on partnerships with other chains as well to make their content part of the paid service. The project was killed in October, just a few weeks before it was supposed to launch, but not before it had spent a reported $30 million and hired more than 100 staffers. It’s not [...]

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