Murdoch: Silicon Valley at Center of Innovation

At the Web 2.0 Summit, the News Corp. CEO touts MySpace, Dow Jones and the growth of the Internet.

SAN FRANCISCO—Rupert Murdoch, CEO and chairman of News Corp., said he believes that Silicon Valley is the most exciting place on earth.

"We are gong through a period of incredible innovation that is getting faster and faster, and this [Silicon Valley] is at the center of it all," he told attendees at the opening dinner for the Web 2.0 Summit here Oct. 17.

"Its not just Internet or media development, its also about climate change and other such areas. There is tremendous innovation going on and this seems to be the center of it all," Murdoch told Web 2.0 Summit co-host John Battelle.

Murdoch said he hoped that MySpace would continue to do as well as it has done since he bought it two years ago.

"It was a real opportunity and it has worked out well for us. We hoped it would do well, but we never imagined it would work out this well. Revenue is now at least 30 times what it was when we bought it two years ago, and if we can keep that trajectory going, well be very happy," he said.

With regard to Google, Murdoch said: "We have a great relationship with them, but we have competitors everywhere and we watch them all with respect. While Google is a threat—a threat to old media, certainly—it is also a friend."

Advertising accounts for about 46 percent of News Corp.s annual $30 billion revenue base, Murdoch said, noting that traditional media such as television are so fragmented that no one is able to deliver the huge audiences they used to for advertisers.

While Facebook "is pretty cool," he said, its also very different from MySpace, which is growing faster.

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MySpace is opening its platform to developers. Click here to read more.

Asked how the acquisition of Dow Jones was going, Murdoch quipped that he did not know as he had not yet paid for it.

With regard to the changes he plans for the Wall Street Journal, Murdoch said he wants to improve it "in every way, from what it does now in finance, to adding general and international news. The Journal will also be expanded to include a lot more news about the arts and fashion and the like."

When Battelle said, tongue-in-cheek, that "you are going to kill The New York Times," Murdoch responded, "That would be nice," before adding that the changes would hopefully make that landscape more competitive.

Looking at possible future acquisitions, Murdoch said that while everything is currently too expensive, he does want a bigger presence on the Internet.

"I dont know what things are going to be like down the line, but I dont see the value in paying 30 times earnings for those companies now," he said.

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