News Corp.-Intermix: Reaction Is Fairly Positive

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Jessica Reif Cohen, Merrill Lynch: “This acquisition is a major step for News Corp as it attempts to improve its competitive positioning in the strategically important online space, an area where the company trails its key rivals. While the valuation seems a bit on the pricey side, the premium was not unduly high and we view the move as extremely positive from a strategic perspective, given the difficulty NWS would have encountered in becoming a major online player entirely through organic growth. We believe that further acquisitions are possible.”

Good Morning Silicon Valley: The headline says it all — “Dead tree finally removed from Rupert Murdoch’s office.” That’s followed by “Look out, Internet; Rupert Murdoch gets it.”

Niall Kennedy: “A pretty huge payout for a company with a $140 market valuation just 10 months ago. Fox just put together an entire Internet division in a weekend.”

Danah Boyd, Many to Many: “Really, it’s a brilliant move for News Corp. (assuming they can stay out of the courts and that the RIAA is nice to them). I’m just not so certain how good it is for youth culture.”

Business Week: “Until now, people have often regarded online media as a parasite living on the host-body of TV, radio, print or, for that matter, the phone network. But this $580 million deal shows that online media is more than that. It’s about creating something new. This deal is a good start for News Corp., which will have a field day exploiting synergies between its huge media empire and MySpace.”

Richard Siklos, NYT (reg. req.): “The acquisition’s price is sure to ignite debate about valuations and durability of new media companies because MySpace, the main attraction among Intermix’s 30-odd Web sites, is only two years old. … The conglomerate is clearly making the claim that MySpace will have staying power in the fast-evolving online world. Part of MySpace’s success has come at the expense of similarly conceived Web sites built around online communities, like Friendster, that have seen the number of users skyrocket but then decline.”

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