Web 2.0: News Corp.’s digital chief is serious about regaining momentum

Jonathan Miller had a tough job as chief executive of AOL, trying to fend off rival Internet businesses as its portal business shrank. Now he’s got a similar tough job as the chief digital officer and chairman of the Digital Media Group at Rupert Murdoch’s News Corp.

Speaking at the Web 2.0 Summit, Miller said his company is trying hard to aggressively expand and turnaround its various digital businesses. The challenge is having a consistent vision and strategy across a lot of different digital properties.

He said, for instance, that he has been obsessed with real-time technology, such as Twitter’s microblogging service that has seen tremendous growth in the past year even as News Corp.’s businesses have slowed.

News Corp. is a traditional media company with properties such as the Fox TV network and the Wall Street Journal — where the digital issues focus on monetizing free content. But News Corp. also made big moves into the digital space a few years ago with the acquisition of social network MySpace and game portal IGN.

With MySpace, Miller acknowledged, as did MySpace’s new chief, Owen Van Natta, in a Web 2.0 Summit appearance yesterday, that the social network has seen its growth stall. He acknowledged that MySpace lost market share to Facebook and that the job at hand is to take advantage of MySpace’s strength with teens and music and focusing on how to grow from that core strength. He said the answer wasn’t necessarily going head to head with Facebook.

“We want to stay out of catch up games,” he said. “Regaining momentum once you’ve lost it is hard. We are trying to be focused.”

As he said so, Miller heaped praise on Twitter’s fast growth and said that Twitter’s deals with Microsoft’s Bing search service and Google have helped make search into a “two horse race” and to help Twitter gain a lucrative business model. He said there was a lot more to do in real-time digital businesses, particularly by opening up a platform. He said MySpace had been a “bit too closed” and that it would benefit more by opening up.

“We have to take a lesson from Twitter and others on that,” he said.

He noted that MySpace has to “make up its mind” about what it wants to be, sort of like a college student with two majors. He noted that Twitter focuses on users with assymmetrical relationships. One person follows another on Twitter and the two don’t necessarily know each other. On Facebook, the friends know each other. With MySpace, it has been a bit of both.

He said that News Corp. is in the midst of culling its various digital properties and evaluating whether to sell them. One of the properties said to be up for sale is the Photobucket web-based photosharing service, which has reportedly been sold to Ontela for $60 million. (MySpace paid $250 million for Photobucket in 2007). Miller said that Photobucket’s situation was under review and that it would be dealt with soon, but he had no announcement to make today. In such cases, Miller said News Corp. is analyzing whether the digital business fits with the rest of its properties or is better as a stand-alone business.

Regarding its traditional business, Web 2.0 Summit co-host John Battelle asked if News Corp. would set up pay walls across its media businesses, forcing people to pay instead of getting content for free. The Wall Street Journal has done well on that front, charging subscriptions for online content, and Murdoch has been vocal about focusing on paid content. But Miller said it wasn’t as simple as delivering the “good news” to people that what they once got for free is now going to cost them money. The answer, he said, is to come up with premium content that will extend the free content and for which people will be willing to pay. He said monetization schemes are being experimented with now.

“I spend half my time in that world trying to figure it out,” he said. “There will be free and paid businesses. The good thing is that paid will exist.”

Miller said he had just come back from a 12-day trip to Asia and that the mobile explosion that is happening there is far ahead of where the U.S. is, despite the rapid growth of the iPhone. Hence, mobile is going to be a key part of News Corp.’s strategy going forward, Miller said.

As for AOL, he said he is friends with the new CEO, Tim Armstrong, and that the most important thing for that company is to gain its freedom from Time Warner.

“I know they are on track for that, but can they really get that,” he said. “The question is if it is on track. They have a good strategy of focusing on content, but the question is how that scales, given they are a portal” and as such are just one of many sites that users will visit.

Part of the message was, don’t count Rupert Murdoch out yet. Miller said Murdoch was extremely curious about the digital businesses, and “he has retained his ambition” despite the great empire he has already built.