News Corp renews lucrative Google deal

News Corp has extended its existing partnership with Google, in a deal which will see the tech giant continue to pay the media company for the use of its content.

News Corp chief executive Robert Thomson.

News Corp has extended its existing partnership with Google, in a deal that will see the tech giant continue to pay the media company for the use of its content.

The announcement of News Corp’s renewal of its lucrative contract with Google coincided with the release of the media company’s third-quarter results.

The value of the deal has not been disclosed, but News Corp’s chief financial officer Susan Panuccio said “the financials were consistent” with the previous partnership which was signed in 2021.

The company’s profitability rose slightly in the three months to March 31, 2024, with chief executive Robert Thomson saying News Corp was “well on track” to record strong annual growth.

“We fervently believe that the company is firmly on a pathway to continued success,” he said.

Total segment EBITDA lifted one per cent to $US322 million ($490m) in the third quarter, up from $US320 million in the previous year, and is tracking at 7 per cent growth over the nine months to March 31, 2024.

“It is also worth noting that for more than a year, digital revenue has accounted for over half our total revenues, and we believe that trend is destined to continue,” Mr Thomson said.

“We are in the midst of an exponential digital revolution, and our own company has continued to change significantly and profitably. Importantly, we are working to promote our quality journalism in the age of generative AI, and are gratified that the most enlightened leaders in the industry appreciate the commercial and social value of that content.

“Separately, to that end, we have this week extended our existing partnership with Google.”

News Corp’s digital real estate platform REA Group registered 15 per cent year-on-year revenue growth in the third quarter to $US256 million, underpinned by higher Australian residential revenues due to price increases, increased depth penetration, favourable geographic mix and an increase in national listings.

Listings in Sydney and Melbourne were up 20 per cent and 18 per cent respectively.

Revenues at Dow Jones in the quarter increased $US15 million, up three per cent on the prior year, driven by growth in circulation and subscription revenues.

Digital-only subscriptions to Dow Jones’ consumer products and The Wall Street Journal recorded strong growth in the quarter, surging 17 per cent and 13 per cent respectively.

Digital-only subscriptions to The Wall Street Journal now represent 88 per cent of the masthead’s total subscriptions.

Foxtel’s total closing paid subscribers were over 4.5 million as of March 31, a one per cent decrease compared to the prior year, despite strong growth in Kayo subscribers.

“Foxtel continued to grow its streaming revenues in Q3, which now account for 29

per cent of circulation and subscription revenues, up from 26 per cent last year, which is

helping to drive overall margins, which rose from 14.3 per cent to 14.5 per cent,” Mr Thomson said.

A soft advertising market and currency fluctuations saw revenue dip by ten per cent at News Corp Australia, although circulation and subscription revenues lifted by $US1 million compared to the previous year.

“Print advertising trends were noticeably weak across all markets,” News Corp’s chief financial officer Susan Panuccio said.

Mr Thomson said a decade ago, News Corp relied on advertising for more than half of its revenue; now, that figure is 8 per cent.

“I should repeat that number, 8 per cent, and half of that figure is now digital advertising, so the character of the company has fundamentally changed,” he said.

In his closing remarks, Mr Thomson spoke of the ongoing incarceration of WSJ reporter Evan Gershkovich in a Russian jail.

“For more than a year, our colleague Evan Gershkovich has been falsely and cruelly imprisoned in Moscow. In public and not-so-public ways, we are actively seeking his release,” he said.

“We deeply appreciate those who have assisted the cause, and we sincerely look forward to his emancipation.”