Rupert Murdoch's News Corp on Thursday made further progress in its internet ambitions by agreeing to acquire IGN Entertainment for $650m in cash.
The video games and entertainment company - one of four key internet properties identified earlier this year by Mr Murdoch as desirable internet purchases - brings the total spent by News Corp on internet acquisitions this year to over $1.5bn.
Mr Murdoch has put aside up to $2bn for acquisitions. He has now bought community site Intermix, sports site Scout Media and IGN - all on his top list. News Corp is still in talks about acquiring Blinkx, a video-focused search engine group which was the fourth internet group on Mr Murdoch's list, according to people familiar with the discussions.
Mr Murdoch, who will head a internet strategy summit with many of News Corp's key executives on Friday and Saturday in Carmel, California, said on Thursday IGN Entertainment, combined with the recent acquisitions of Intermix, Scout and the popular internet sites of his Fox entertainment and news businesses, had made News Corp “the fifth most trafficked presence on the web”.
As well as paying $650m in cash, News Corp will take on $50m of IGN's debt. The company includes Gamespy.com, askmen.com and Rotten Tomatoes - a film review site - which are targeted at young men, a group prized by advertisers.
According to Doug Mitchelson, analyst at Deutsche Bank, IGN's concentrated audience of young males is a demographic “harder to reach through traditional media”.
He said News Corp had now developed scale positions in internet sites covering entertainment, news and sports. “Remaining is tying the platform together with navigation, convenience and community features such as search, email and blogging,” Mr Mitchelson said.
Mr Murdoch embraced the internet earlier this year after largely shunning the medium following losses made during the internet bubble five years ago. Like many of his competitors in the media sector, Mr Murdoch has realised advertising revenues are shifting to the internet and so are audiences.
Unlike many other media companies, Mr Murdoch has moved rapidly to develop a strategy. Three months ago, News Corp barely had an internet presence. In July, following the acquisition of Intermix, which owns MySpace.com, News Corp's unique monthly users doubled to 45m. The IGN acquisition pushes this to about 70m.
Richard Greenfield, analyst at Fulcrum Global Partners, said it was unclear whether the IGN deal would create value for News Corp shareholders but showed Mr Murdoch's willingness to spend capital to build businesses.