Ad boom sees News Corp profit soar

NEWS Corporation chairman Rupert Murdoch has revealed that "booming" advertising revenues from the company's Australian arm have helped to drive a significant rise in its international operating profit.

NEWS Corporation chairman Rupert Murdoch has revealed that "booming" advertising revenues from the company's Australian arm have helped to drive a significant rise in its international operating profit.

News Corp has reported a 16 per cent growth in operating earnings to $US1.44 billion for the three months to March 31. The company's bottom line net profit trebled to $US2.7 billion for the period, following a $US1.7 billion one-off gain on the company's stock and asset swap with Liberty Media.

In February, Liberty gave up its 16 per cent stake in News Corp, in exchange for News Corp's stake in DirecTV and other assets.

A feature of the result has been a jump in News Corp's Australian ad revenues, which have helped the company's newspaper division to a 38 per cent rise in operating earnings for the period.

Mr Murdoch was bullish about the Australian performance: "In Australia, it's just booming. I mean, it's going up all the time."

News Corp's local division, News Limited -- which publishes The Australian -- benefited from an "increase in display advertising ... led by strength in the retail and real estate sectors".

The strong local performance has come as the company has indicated it has stepped away -- at least for now -- from a possible multi-billion-dollar bid for online search and media group Yahoo, despite the abandonment of Microsoft's $US47.5 billion bid for the group.

Mr Murdoch indicated yesterday he had not had any discussions with Yahoo "in a couple of weeks".

News Corp chief operating officer Peter Chernin said the company was content with its current internet investments.

"We will always look at strategic options, but we feel very comfortable with our current positioning," he said.

Apart from the Australian growth, News Corp's newspaper division's result included the first full quarter of earnings from the company's $US5 billion-plus acquisition of Dow Jones & Co, owner of The Wall Street Journal, in December.

But Mr Murdoch said the more he worked with Dow, "the more opportunities I see" in improving and expanding its current business. "The actual subscription rate for the print journal is a lot less than half of The New York Times, and we intend to put that right," he said.

"Between that and online rates and online expansion, we can see improvements in revenues of hundreds of millions of dollars (at Dow). I expect that we will at least double our revenues, and do a lot more than that to our profit margins online."

In talking up Dow's potential, he also took a swipe at previous management: "This is a business which has been under-managed, or not managed, for decades."

Mr Murdoch added he was as confident about Dow making money "as any acquisition I have done".

But he has expressed some concerns about the US economy and its possible impact on advertising. "There is no doubt that the (US) consumer economy is stressed, and you're seeing that reflected in advertising: more short-term planning, short-term bookings," he said.

"We're increasing our share of market in our stations and everywhere, even though there are some declines in total business."

The concerns about the US economy have so far not hurt News's US TV division, which recorded 53 per cent growth for the March quarter to $US419 million, driven by lower prime-time programming costs and ad revenue growth.

Additionally, the company's cable network programming division -- which includes the Fox News Channel -- recorded a 17 per cent operating profit rise despite launch costs for Fox Business Network.

But the Fox Interactive Media division -- which operates MySpace -- will not meet an ambitious $US1 billion annual revenue goal it set for itself for the financial year. Mr Chernin indicated its revenue figure for the year to June was likely to be $US900 million, but emphasised it was a "very healthy" business. "It took Google five years to hit a billion dollars ... and we'll get there in a little over three years. We're incredibly optimistic about the future of social media," Mr Chernin said.

Mr Murdoch also remains optimistic about the company gaining control of Long Island-based newspaper Newsday. "We're hoping to wrap it up within the next week," he said.