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MySpace vanishes $254m from News Corp coffers

Sale of has-been social network undervalues stock

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Television and film continue to be News Corp's core area of sales growth, even as other aspects of Rupert Murdoch's empire – including recently-sold MySpace and scandal-ridden News International – unsurprisingly had a bumpy Q4.

The company rolled out Murdoch at its conference call in New York to personally anoint the results (13-page PDF/74.3KB), he also tried to draw a line under News Corp's recent bad press brought on by, well, allegedly bad press people.

But newspapers and indeed social networks aren't the media baron's main going concern. So despite notching up a $254m loss associated with the recent offloading of MySpace and the phone-hacking revelations that have engulfed sister firm News International leading to the recent closure of its most successful tabloid News of the World, News Corp reported final quarter publishing revenue of $2.35bn.

That compares with $2.12bn for the same period a year earlier. The company attributed much of the sales increase to higher advertising and buoyant circulation at the Wall Street Journal.

Operating income in that division was up $74m to $270m in Q4, said News Corp.

But the fire sale of MySpace, which Murdoch bought for $580m in 2005, proved a total failure for the firm.

That meant total net income for the quarter dropped to $683m, or 26 cents a share, down from $875m, or 33 cents a share, in the same three-month period in 2010.

Profit from continuing operations for Q4 was up from $902m last year to $982m.

Total sales at News Corp jumped 11 per cent in the firm's final quarter to $8.96bn.

Now for some words from your octogenarian sponsor of Glee, 24, Avatar, etc...

“I'm pleased that once again News Corporation exhibited operational momentum in both the final quarter of fiscal 2011 and for the full year driven by significant increases at our market-leading Cable Network Programming and Television segments," said Murdoch.

"While it has been a good quarter from a financial point of view, our company has faced challenges in recent weeks relating to our London tabloid, News of the World. We are acting decisively in the matter and will do whatever is necessary to prevent something like this from ever occurring again."

He added that there had been "no material impact" on News Corp's other parts of the business.

Indeed the combined revenue in cable network programming, filmed entertainment, television and direct broadcast satellite TV segments hit $6.3bn in Q4, on operating income of $1.2bn.

"Our broad, diverse group of businesses across the globe is extremely strong today," said Murdoch, who clearly plans to hang around his empire for longer than some critics of the 80-year-old might have hoped.

"The drivers of our businesses are intact, our position is strong and our future is promising.

"Our fundamental goals at News Corp are to produce sustained, meaningful value for shareholders, provide outstanding content and services to customers and consumers – and do it with integrity. These goals are interrelated and all three are critically important. And we will deliver on them.”

Murdoch's derailed bid to buy the remaining 59 per cent of BSkyB that his company didn't already own led to News Corp dishing out a "breakup fee" of $63m. ®

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