In a major restructuring of its News Digital Media unit, News Corp. plans to hand control of its Fox-branded news, sports and entertainment Web sites back to their TV counterparts.
Transition is expected to take up to six months, with about half of News Digital Media's 450 Los Angeles-based employees laid off during that time. Move is expected to save News Corp. tens of millions of dollars.
News Digital Media has spent the last two years serving as an incubator of
FoxNews.com,
FoxSports.com,
FoxMarketwire.com and
Fox.com.
But with Thursday's decision, Fox News Channel, Fox Sports and Fox Broadcasting will now oversee daily operations of the sites and their soon-to-be-reduced staffs.
News Corp. deputy chief operating officer Lachlan Murdoch will manage the cost-cutting effort.
Company sees its Web sites as more of a marketing tool and not as a major revenue generator for the company.
"We strongly believe that combining the news, sports and general entertainment productions and newsgathering operations will greatly reduce costs while ultimately providing an enhanced experience for our audience and greater integrated advertising opportunities for our sponsors," said News Digital Media prexy Jon Richmond, who remains with the smaller entity.
Fox's television networks originally oversaw their own Web sites but gave up control in 1999, once News Digital Media was formed in an effort to consolidate Murdoch's costly new-media assets in Los Angeles.
At the time, the webs considered dot-coms a competitive threat and didn't feel that the Internet was an important enough tool to have on their side.
"There was a fear that television and Web programming would rival each other," Richmond said. "On the contrary, we have seen a strong symbiotic relationship develop between Fox' s online and broadcast platforms, and the time is right to capitalize on that relationship by streamlining our sports, news and entertainment programming.
"These sites belong in their operating groups. The Web today is an important component. By moving the production units into those operating units, we'll see tremendous amount of cost efficiency and growth."
Who will manage each Fox-affiliated Web site is still to be determined, although it is expected that each current topper will move on with his or her site.
Broadband activities
Although some say that the future doesn't look bright for News Digital Media, Richmond stresses that the division will continue to focus on identifying new wireless and broadband endeavors for News Corp. to embrace.
Richmond will also continue working with investment spinoff News Digital Ventures to identify technology candidates for Rupert Murdoch to fund. That division's portfolio currently includes stakes in Juno,
TheStreet.com,
PlanetRx and
Yupi as well as the wholly owned Stats Inc.
Announcement comes only days after News Corp. said it would scale back significantly its $1 billion partnership with online health venture
WebMD.
Contact Marc Graser at
marc.graser@variety.com