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The Financial Times is reporting that News Corporation, owners of the FOX Network, are considering the sale of their mobile division – FOX Mobile Group. It consists of properties such as Jamba/Jamster which provide consumers with content such as ringtones, wallpapers and more. Sound archaic? It is… and that’s exactly why News Corporation wants to divest:
The second banker said that although the sector has grown, the dynamics have changed, making it a more challenging market than when News Corp acquired it. “App stores are taking all the value,” he said. For this reason, it would be difficult for News Corp to achieve the same valuation it bought Jamster for, he said.
The business may have declined recently due to difficulty with leveraging MySpace to drive traffic to Jamster, the executive added. When News Corp purchased Jamster, it believed it could cut costs by eliminating marketing spend, and integrate the mobile content company with MySpace. Now that MySpace is seeing sluggish growth, Jamster may be as well, he said.
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Rather than give up on a $381 million dollar investment why not try to alter the DNA of the Mobile Group to be more focused on these new industry dynamics? Clearly they’ve done a good job taking MySpace to Android – why not “mobilize” their other properties and bring them into this next generation of interactivity? It seems like the company is letting everything but MySpace go as they recently sold both Photobucket and Rotten Tomatoes and are working on an “undisclosed project” for MySpace after firing the CEO in February. Why not leverage these properties WITH MySpace?
Potential suitors have been rumored to include a wide range of companies from carrier like Vodafone, Telefonica and Telecom Italia to other mobile media companies like Zed, Buongiorno, Dada, and Flycell. Taking an aging asset and bringing it into the new age is one thing – purchasing a business that is collecting dust is another. I can’t see this being a very good buy for any of these companies unless they’ve got a very specific plan to fold in the current business.
On the other hand, MocoNews reported that last year Fox Mobile Group was attempting to launch a Hulu-like service for mobile phones and if there was anything noteworthy in this department, why couldn’t a company like Hulu itself express interest? Maybe because 9-months ago they claimed it would “debut in the coming months” and it still isn’t anywhere to be seen.
I’m thinking that News Corporation sees MySpace as their biggest opportunity and wants to drop everything else to focus on righting the aircraft before it crashes into Mt. Facebook. Do you see the assets of Fox Mobile Group fitting in anywhere in particular (with another company)? Play CEO for a minute and tell us what you would do.
From my experience with the MySpace API, it seems like they are letting it go to shame too. It takes months to get an application developed on the platform. As far as Hulu goes, from following XBMC/Boxee development, it appears that Hulu doesn’t want their content (including their advertising) to be displayed anywhere outside of the flash player on their website in whatever browser they decide to support. Also, I believe Fox, ABC and NBC all own roughly equal shares of Hulu, don’t they?