Rupert Murdoch says papers are on the rack
telegraph.uk
By Juliette Garside
Last Updated:
10:52pm BST 30/05/2008
Rupert Murdoch, chief executive of News Corporation and publisher of the Wall Street Journal, warned that financial pressures on US newspapers would see them "deteriorate tremendously".
Rupert Murdoch: 'huge opportunity'
Speaking at the D: All Things Digital conference in California, he said newspapers will have to lower their profit margins from 30pc to 10pc, and publish stories people "want to read" rather than articles designed to win Pulitzer Prizes.
He said the Wall Street Journal, acquired by News Corp last year, would begin taking market share from its rival, the New York Times within months by increasing its coverage of general news.
Newspapers had already made every economy possible in production but had not yet reduced the costs of employing journalists, he said, but, when that begins to happen, The WSJ will have a "huge opportunity" to increase its share of affluent, educated readers in the US.
Responding to a question about whether his paper's website, wsj.com, would abolish subscriptions, Mr Murdoch said rates were more likely to increase. "People want to read it every day. They need to read it."
Mr Murdoch also said he was "mystified" that Yahoo! had turned down Microsoft's $47.5bn (?24bn) takeover bid earlier this month, an offer he described as generous.
He questioned the value of a tie-up between Yahoo! and online advertising market leader Google. The two are known to have discussed outsourcing advertising sales for Yahoo! searches to Google, but regulators would look closely at any such deal.
"There is a real regulatory risk for everyone in this," said Mr Murdoch. "It would be sad if they did a deal with Google and it got held up for 12 months, while Google continued to eat their lunch."
"Google is gushing money," he added. "You can see exactly why Microsoft is worried." He described Google as the "greatest company in America", and said it could use its cash pile to challenge Microsoft.Billionaire investor Carl Icahn, who is calling on Yahoo!'s board to strike a deal with Microsoft, was dismissed as just making "noise". Noise that could earn him $200m, said Mr Murdoch.
He was asked who should be the next US president. He said Democrat candidate Barack Obama was "like a rock star" and he regarded Republican nominee John McCain as "unpredictable".
However, he added that he had not yet decided which candidate to support.
Murdoch: newspapers will "deteriorate tremendously"
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