Citing high "impairment and operating charges" the company incurred through its ownership of MySpace, News Corp. shareholders lost 8 cents per share and the company lost 11% of its total revenue in their fourth quarter. So it probably shouldn't come as a surprise that Murdoch would announce plans to end free access to all of his company's online offerings on the same day.

Reports the Financial Times:

Rupert Murdoch has vowed to charge for all the online content of his newspapers and television news channels, going well beyond his prediction in May that the company would test pay models on one of its stronger papers within the year.

"We intend to charge for all our news websites," Mr Murdoch said.

"If we're successful, we'll be followed by all media," he added, predicting "significant revenues" from charging for differentiated news online.

He warned that "the big competition will be coming from the BBC," which offers online news for free, but said: "Our policy is to win."

Murdoch's move, if he holds fast to his plans, could play a substantial role in the future of content availability on the internet. While charging for online access to the Wall Street Journal has been mildly successful due to the willingness of the paper's affluent readership to pony up, it'll be interesting to see if the same holds true for New Corp.'s other, less "classy" properties. If his move to force people to pay for access to Glenn Beck, Bill O'Reilly, the News of the World, the New York Post, etc. is successful, expect many others to follow suit, something sure to please David Simon. However, this idea sure as shit seems to have fail written all over it.

Pic via

Will Gawker start buying "Julia Allison" ads, to cement its ownership of that unhappy subject? Will Valley entrepreneurs buy their own names as keywords, to prevent rivals from doing so? Will we all eventually pay a tax to Google — advertise our side of the story, or let others tell us for it? All intriguing. While you muse over that, I'm going to start pricing out "Jason Calacanis" ads.

1. Publishing economics. The New York Post's new size, 12 inches high, down from 13½ inches, will make it the size of the Wall Street Journal, folded in two. I'm told this will allow both Murdoch-owned papers to be produced on the same presses. If Murdoch's rumored $580m bid for Long Island's Newsday goes through, News Corporation will achieve even greater savings. A person familiar with the deal said the deal, by combining printing and distribution of the New York Post with another title in the same metropolitan market, would wipe out the $50m in annual losses that the Australian media titan still bears on his beloved New York tabloid. This move would be straight out of News Corporation's UK playbook: there, the media conglomerate transformed the profitability of its UK titles in 1986 by breaking the print trade unions and moving production of The Times, The Sun and other London papers to a heavily fortified print works in Wapping.

2. Influence. Rupert Murdoch may be the personification of the press baron, but he's never had anything like the influence in the US that his array of newspapers and television networks brought in the UK. His solitary US newspaper title, the New York Post, has given Murdoch influence over New York City and State politics, but precious little juice in Washington, DC. Murdoch has never had the access to the White House, even under George Bush, that he had to Number 10 Downing Street during Tony Blair's tenure as UK prime minister. Fox News is powerful, of course, but the cable news network is too reflexively conservative to provide any real influence over the liberals who are likely to run national politics, and appoint regulators, over the next political cycle. By creating a national title in the Wall Street Journal, and taking control of about half the New York newspaper market, Murdoch or his successor should be able to withstand any political effort to break up his empire. Look at the UK: the Labour party, which long sought to curtail News Corporation's media power, has entirely given up; about a decade ago, Murdoch passed the critical threshold beyond which he became untouchable. By creating a similarly interlocking network of television and newspaper operations in the US, he can achieve a similar result on a grander scale—if competition authorities allow.

3. Mortality. Last month, the Australian media mogul turned 77 years old. His motives are hard to divine, but one has to presume that the nightmare would be the breakup of an empire he has spent a lifetime in building, the fate which awaits Time Warner and Sumner Redstone's holdings. News Corporation is the one media conglomerate which makes some sense: the profits are made on sports and entertainment broadcasting; tabloids and quality newspapers provide political protection. That's the formula in the UK, at least. In the US, the richest media market, Murdoch bought New York Post in 1976 and has gradually accumulated television stations over the three decades since, launched a fourth entertainment network and a surprisingly successful cable news channel, Fox News. But it is only now, as proprietors such as the Bancroft family and Sam Zell lose hope in the future of newspaper publishing, that Murdoch has been given the scope in the US to achieve the same concentration he has in the UK. And it is no wonder that Murdoch is in such a rush. These newly available newspapers need a dramatic intervention if they are to make the transition to the internet. Potentially hostile Democrats are about to take control of executive and legislative branches of government. And Murdoch, the last great media mogul, is mortal. The aging press magnate can deny the reality by wearing black polo-neck sweaters on the urging of his much younger wife, but he doesn't have much time to conclude his legacy.

(Citizen Kane's desolate mansion, in the Orson Welles movie based loosely on the life of William Randolph Hearst, the pre-eminent press baron of an earlier age.)

The Post:

Microsoft has been so cagey about the candidates it plans to nominate to Yahoo!'s board that speculation is mounting that the software giant actually doesn't have anyone lined up.

The Post:

The word on Wall Street and in technology circles is that the Redmond, Wash.-based company has had a list of candidates drawn up since early March, but that the company is having difficulty getting people to sign on.

The Post:

The deal is seen as a make or break deal for Microsoft CEO Steve Ballmer, who has staked both his reputation and the company's ability to do battle with Web titan Google.

The Post:

Other sources familiar with the matter dispute that Microsoft is having trouble putting its slate together, noting that the company has signed up 10 board candidates and two alternates and is ready to pull the trigger on nominating them if and when it has to

So, are readers finally tiring of the torrent of shallow news about no-name celebrities, as Salon believes? The reasons for the abrupt decision are more prosaic, and depressing. Pagesix.com experienced its first day with more than 1m pageviews, last week, when the site published a gallery of photographs of Eliot Spitzer's hooker, Ashley Alexandra Dupré. But it was not making sufficiently rapid inroads into a market dominated by Time Warner's TMZ, and gossip blogs such as Perez Hilton. But the decision to shutter the spinoff gossip site likely owes even more to the Australian media mogul's pessimism about the US economy, and advertising spending.

Murdoch, disclosing a slowdown in ad revenue at his Fox television stations and newspapers, has predicted a "temporary downturn for a year or so." Other media companies, such as the New York Times, are also suffering from the advertising downturn, and have cut costs by making piecemeal layoffs.

The News Corporation boss, who has funded a decade of losses at his tabloid, the New York Post, is typically a patient investor. But he can also be decisive. He will be wary of overstretching the company, particularly after stretching to acquire the Wall Street Journal. During the last big advertising downturn, Murdoch nearly lost control of his company.

Anyway, before competitors gloat at News Corporation's reverse, they should remember this: if advertising spending has indeed turned down, the downturn will not spare web sites. The web's boosters hope that newly cost-conscious marketers will simply redirect their budgets from print and television to the web; that was the hope during the last recession, and it was wishful thinking, then and now. Murdoch will be embarrassed for a day; other media groups will be subsidizing loss-making websites for months before they come to the same conclusion.

Rather, money does matter, but not in the way the Post thinks. As important as the upfront investment is, the terms of a separate agreement to carry ads are just as vital. And the devil here is in the details. Facebook rightly fears that giving Google access to its ad inventory would let it learn the secrets of targeting ads to social networks. Microsoft, on the other hand, is far less likely to figure things out.

Microsoft, however, has the lion's share of Facebook's U.S. banner-ad inventory through 2011. It's a deal that is lucrative in the short term for Facebook, but will handicap it in the long run.

But I think Facebook's figuring a way around it. The simple way, of course, is to take Microsoft's money and restucture the advertising deal to make Microsoft a backstop to Facebook's own ad efforts. As Facebook's own ad sales grow, Microsoft's presence on the site will slowly dwindle. I suspect Facebook is seeking similar terms for Google on international ads, so it doesn't make the same mistake it did with Microsoft.

And if that doesn't work?

Facebook recently trademarked "SocialAds," reportedly the name for the system it plans to unveil in New York next month. While Facebook is growing fast, the name of the game in online advertising is running a network. AOL has Advertising.com; Google has AdSense; and Yahoo has its Yahoo Publishers Network. By selling ads on other websites, these players expand their reach, gather more data on which ads are effective, and make better use of their salespeople.

Even if it doesn't wrestle back control of its U.S. ad inventory from Microsoft, and even if it lets Google sell international ads on its behalf, I bet that Facebook will start selling ads on other websites, targeting the users of those sites based on their activity on Facebook. It doesn't need to share private data with those independent publishers to do so; it can just serve up the ads, charge higher rates for better targeting, and lure those websites out of the giants' grasp.

In theory, of course. Facebook's advertising technology is young and untested. And to test it, it needs data; to get data, it needs ad inventory. That's why the Post botched this story. Facebook has a hard choice: Cold, hard cash upfront, or a chance at Google-like riches down the road. It's not as simple as just cashing a big check — even though that's the only kind of story East Coast media seems to understand.

• Sources say venture capital firm Bridgescale is throwing a party for over 100 people at the Quadrus conference center on Sand Hill Road.
• Note to Alleywag applicants: We found writers for Friday and Sunday, thanks!
• Microsoft co-founder Paul Allen sells a chunk of his share in Dreamworks Animation, giving the New York Post a chance to drag up the worst possible photo of him (shown here), even worse than the shot of Yahoo CEO Terry Semel they rant the other day. Really, are they paying a kid with a camphone to sneak into meetings with these execs, or are they just blowing up 16x16 images? [New York Post]
• By the way, if you haven't been watching Bill Gates, the Microsoft founder is spending his days saving the world from AIDS. In other news, Mac fanboys still call him a devil because he built a crappy operating system. [Sci-Tech Today]
• Another Microsoft exec leaves to "spend more time with his family." Can we get a new alibi already, or has no one in tech actually learned to spend time with their families before they get unpopular at work and are shoved into retirement? [Register]
• No tech mogul for prez — Nextel cofounder and former Virginia governor Mark Warner announced today he won't enter the '08 race. [Washington Post]
• Dear Motley Fool: Shut up and eat your Grand Slam. [Motley Fool]

REALTY BITES FOR YAHOO! [NY Post]

INTERNET upstart YouTube, the bane-du-jour of copyright holders everywhere, won't sell itself for anything less than $1.5 billion, The Post has learned.

That's not even an offer, that's the kind of figure you throw out to stop anyone bothering to buy you. Founder Chad Hurley's been saying for months that he's not selling YouTube.

Now the potential buyers play a game of "oh-yeah-well-we-don't-care." A "senior industry source" told the Post, "If they were willing to take $200 million to $300 million, I would buy it tomorrow." Oh man, YouTube got served.

Grr, now I gotta add both to the YouTube valuation voodoo graph.

YouTube's got a fat idea of itself [NY Post]