News Corp builds online ad network

By Kenneth Li

NEW YORK (Reuters) - News Corp's NWSa.N Internet division plans to launch an online network to sell advertising across Rupert Murdoch's sprawling empire and even to other media companies as early as the first half of next year.

Fox Interactive Media (FIM) President Peter Levinsohn told the Reuters Media Summit in New York on Monday that the network, internally dubbed "FIM Serve," is the subject of discussion across the company after first being built for its MySpace online social network.

"We're well down the path in terms of discussions with some of the other News Corp properties to do ad serving," Levinsohn said. "Ultimately we'll take the company off network and become an ad network for assets outside of the News Corporation empire."

"It could happen as early as the first half of next year," he said. "We're ready to go ... we're starting to have conversations outside now."

The launch of a broader ad network follows a frenzied buying spree of privately held ad networks by Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz), Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz), Time Warner Inc's (TWX.N: Quote, Profile, Research, Stock Buzz) AOL and Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz) to dominate the fastest-growing segment of the global advertising industry.

As marketers eye threats of a U.S. recession in 2008, media like the Internet that stress accountability in terms of user responses would weather such storms better, Levinsohn said.

He noted that the ad network focuses on graphical display advertising and would not conflict with the company's partnership with Google, which provides search listings.

Fox Interactive's network could also be used eventually to sell ads across wireless outlets, he added.

HYPERTARGETING

The seeds of News Corp.'s online ad push come from its work to better target MySpace users, a project which it launched over the summer called HyperTargeting. The technology mines the profiles of its 110 million global users to bring them ads more relevant to their interests.

But across the Internet, subjecting users to more marketing has drawn the ire of privacy advocates. Rival social network Facebook faced a backlash from thousands of users after it allowed marketers to place ads on user pages based on products they bought online.

Facebook said it allows users to opt out of the program, but advocacy group MoveOn.org criticized the technology for requiring members to opt out for every purchase.

The new ad network also begins to address Fox Interactive Media's role inside Murdoch's portfolio of companies that include the 20th Century Fox movie studios, Fox News Channel, the Times of London newspaper. Also, a deal to acquire Wall Street Journal publisher Dow Jones & Co Inc DJ.N is awaiting Dow Jones shareholder approval.

Videos from Dow Jones properties, such as the Journal's Web site or MarketWatch.com, could someday appear on MySpace TV, he said, or as an application within MySpace, Levinsohn said.

MySpace now boasts 72 million unique monthly U.S. visitors and has benefited from the deep pockets of News Corp. But the popular online hangout has also had to defend itself from fast-moving rivals, and is trying to differentiate itself from rapidly growing rival Facebook.  Continued...