News Corp. Mulling Sale Of Struggling Mobile Content Properties
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News Corp. (NYSE: NWS) may shed the ailing Fox Mobile Group, including the Jamba and Jamster brands, to focus on digital properties, like MySpace, reports The Financial Times.
SEE ALSO: Fox Mobile To Bring Premium Video Service To Mobile; Hires Two Ex-Thumbplay Execs
A sale would not be a big surprise. After News Corp. acquired the company in two separate chunks from VeriSign (NSDQ: VRSN) for a total price tag of $381 million, it failed to do much with the asset. Last year, it created the Fox Mobile Group to roll out a new video service for smartphones, which was rumored to be akin to Hulu, but that project has been delayed several times. In addition, the group has been decimated over the past year, by layoffs and a mass executive exodus that led to the departure of the CEO, COO and CMO.
Bankers say Zed, a Madrid-based mobile content company, is the most likely buyer, but others point to Italian mobile media company Buongiorno (BIT: BNG), Dada.net, and Flycell, or even carriers, like Vodafone (NYSE: VOD), Telefonica (NYSE: TEF) and Telecom Italia, as possibilities. In this environment, a sale could be tough. The mobile content industry is not as strong as it once was, and has struggled as consumer tastes have shifted away from ringtones and wallpapers to more sophisticated devices that run applications.
Revenues for News Corp’s ”Other” segment, which includes the Fox Mobile Entertainment, dropped 20 percent to $2.4 billion in the fiscal year ended June 30, 2009, The Financial Times reports. At the same time, operating losses at News Corp’s ”Other” segment widened to $363 million from $84 million in the year-ago period.
Posted In: Mobile, Companies, News Corp., Fox
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