Massive media conglomerate News Corp. will spend over half a billion dollars to increase its Internet presence with the purchase of Intermix Media, a company with a network of Web sites devoted to entertainment, gaming and social networking.
News Corp. signed a definitive agreement to buy Intermix for about US$580 billion in cash, a transaction that the parties expect to close in this year's fourth quarter and that is subject to certain conditions, including the approval of Intermix stockholders.
With the addition of Intermix's more than 30 Web sites, News will almost double its U.S. Web traffic to more than 45 million unique monthly users, New York-based News Corp. said in a statement Monday.
The Intermix Web properties, which include the social networking sites Grab.com and MySpace.com, will become part of News' Fox Interactive Media Unit.
Intermix had revenue of US$79 million in fiscal year 2005, ended March 31, 2005, up from US$52.9 million in the previous year. Net income in fiscal year 2005 came in at US$4.5 million, compared to a net loss of US$13.1 million in fiscal year 2004.
In June, Intermix announced it had reached an agreement in principle with the Internet Bureau of the Office of the New York State Attorney General to resolve a pending lawsuit related to adware distribution.
The proposed settlement calls for Intermix to pay US$7.5 million over three years to the State of New York, and to permanently discontinue distribution of its adware, redirect and toolbar programs, Intermix said in a statement last month.
Prior to the proposed settlement, Intermix had ceased distributing the programs in question, which the company describes as being part of a "legacy business" it is no longer involved in. Intermix isn't admitting any wrongdoing or liability in the proposed settlement.
News Corp. closed its 2004 fiscal year on June 30, 2004 with revenue of US$21 billion, compared with US$17.5 billion the previous year, and net income of US$1.6 billion, compared with net income of US$1 billion in fiscal year 2003.
News Corp. produces movies and television shows and publishes magazines, books and newspapers. It owns, among others, the 20th Century Fox movie studios, the Fox Broadcasting Co. television network, the DirecTV satellite television provider, the TV Guide magazine, as well as newspapers such as the Daily Telegraph in Sydney, the New York Post in the U.S. and The Times in the U.K.
Neither News Corp. nor Intermix immediately returned calls seeking comment.