News Corp. Reports Second-Quarter Loss, Takes Swing At Facebook, Google

News Corp., Knewz, Fox, WSJ, NYT
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News Corp. reported a loss in its second fiscal quarter, and blamed Facebook and Google for failing to do enough to combat a “dysfunctional” news environment.

Chief Executive Robert Thomson noted the profound changes sweeping the world of digital content, saying the tech disruptors are in the “midst of a particularly disruptive period commercially, socially and politically.” He said Google and Facebook have taken only “modest steps” toward fixing what a digital environment that he called “dysfunctional at its core” and “dystopian.”

“The bot-infested badlands are hardly a safe space for advertisers, whose brands are being tainted by association with the extreme, the violent and the repulsive,” Thomson wrote.

Thomson positioned News Corp. as offering an antidote — journalism with quality and integrity. Its premiere brands, such as the Wall Street Journal and The Sun, have been rewarded with subscriber and audience growth.

“But the potential returns for our journalism would be far higher in a less chaotic, less debased digital environment,” Thomson said in a statement ahead of the company’s earnings call.

News Corp. reported revenue of $2.18 billion, exceeding analyst forecasts of $2.13 billion for the December quarter. It reported a net loss of $66 million, or 14 cents a share, due to a one-time charge relating to the new tax law.

The adjusted per-share earnings of 24 cents beat analysts’ consensus estimates of 19 cents.

News Corp. Executive Chairman Rupert Murdoch kicked off the battle with the digital platforms last month, by suggesting that Facebook and Google should pay publishers a carriage fee, similar to the model adopted by cable companies. He argued that the digital giants need to do more than acknowledge their roles in promoting “fake news.”

“The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services,” Murdoch argued. “Carriage payments would have a minor impact on Facebook’s profits but a major impact on the prospects for publishers and journalists.”

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