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After the close of markets Monday, News Corp released their second quarter earnings.  The numbers, which are reported below, were very good on an operating level despite slightly missing profit expectations. Also, in a true rarity for this earnings season, the company raised its guidance for fiscal 2008 operating income. 

More insightful than the numbers was the analysts call and Q&A. Rupert Murdoch’s participation is a little like a light version of Warren Buffet’s famous annual meeting speeches.  Mr. Murdoch is at times frank, occasionally reserved but always on point and extremely well informed.  At one point, he even corrected one of his colleagues on the numbers. What follows are some of Murdoch’s comments on the News Corp empire, broken out by theme:

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Rather than pulling the plug after MTV’s Urge music failed to catch on, Viacom (parent of MTV Networks) withdrew from the music subscription business by merging Urge with Real Networks’ Rhapsody and retaining 49percent of the joint venture.  Now, on a smaller scale, Yahoo is doing similar with their Music Unlimited subscription service. Yahoo Music Unlimited, will now be managed by Rhapsody America. Yahoo Music will refocus on providing features for their web traffic.

The strategic relationship announced with Real Networks today will be implemented over the next few months. During that time, Yahoo Music Unlimited subscribers will be converted over to Rhapsody. Click to Read More

In 1998 Patrick McGovern and John Battelle launched the Industry Standard as a news magazine covering Internet business.  They called it “the news magazine of the Internet economy.”  The audience grew along with the Internet industry and by 2000, with high volume ad sales, the publication had annual revenue north of $100m and staffing in the hundreds (450 by some accounts).  Then, as rapidly as they climbed, they fell.  Victim of the same bubble they were reporting on. The Industry Standard shut its door in August 2001.  Today, the magazine is being reborn; reinventing itself from a Web 1.0 publication to Web 2.0 social news website.

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Sometimes rumors sound crazy.  Sometimes they’re so crazy, they end up becoming true.  Microsoft proved that early this morning with the surprise announcement of an unsolicited cash and stock takeover offer for struggling web giant, Yahoo.

Rumored at times to be possible, probably, and impossible, one thing a deal between the two never seemed was real. For more than eighteen months of chatter, partnership talk and innuendo, this prospect seemed like somebody’s fantasy.  Now it is shockingly real.

Microsoft has offered to pay $31 a share, which represents a purchase price of approximately $44.6 billion. The proposal would provide for cash and stock payment. Yahoo! shareholders will be able to choose either cash or stock, with the total deal being half of each. The offer represents a 62 percent premium above the closing price of Yahoo! stock on Jan. 31, 2008.

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With the widespread news of Microsoft’s unsolicited takeover offer for Yahoo now spreading across the news channels, here are the facts from their original source.

The following is the text of Steve Ballmer’s letter to Yahoo’s Board of Directors proposing the acquisition

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Want to rent a movie through Apple TV? Not so fast.  Steve Jobs promised the Macworld faithful the necessary software update enabling the functionality would be ready by the end January.  Turns out, however, January is over and “it’s not quite ready.”

For the few million Apple TV owners, the rental functionality and other software adjustments should be available within a week or two.   Apple didn’t provide a reason when announcing the delay.

It’s not the first time Apple TV has had a go-to-market hiccup.   The initial launch was also delayed.  It comes down to philosophy.  Despite the urban legend that Steve Jobs pushes immovable deadlines and plays task master to engineers with the mantra “real artists ship,”  Click to Read More

Amazon was a pioneer in establishing internet based e-commerce.  Now, in their second act, they look like they are trying to blaze a similar trail in the sale of digital goods.  Today, in line with those efforts, Amazon announced they will buy spoken word (audiobook) publisher Audible for $11.50 a share in cash. 

At the $11.50 a share price Amazon is paying a 24% premium over Audible’s Wednesday closing price of $9.33 a share.   Two months ago Audible traded upwards of $14 a share.  Last quarter they did sales of $27m and lost $192k.  Those metrics may make the purchase look like a bargain (and it probably is), but views on that are likely to be divergent.  Part of the reason: last month, Audible’s largest shareholder, Apax, signaled a lack of confidence in the company when they (and affiliates) began selling off their 23% stake in the company. 

Probably the best near term gauge for valuing this deal as an Amazon shareholder lies in measuring the strategy it reflects rather than the approximately $300m purchase price.

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