Rupert Murdoch’s son quits as a News Corp. exec

Rupert Murdoch’s son quits as a News Corp. exec: “LONDON (MarketWatch) — Lachlan Murdoch announced plans to leave the family business Friday, saying he’s quitting as deputy chief operating officer of News Corp. to return to his native Australia.”

My take: The position of “deputy chief operating officer” of the media conglomerate was specially created for the 33-year-old son of the famed, and staunchly conservative, media magnate, the 74-year-old Rupert Murdoch. It seemed to be a sort of “stepping stone” job (and a hugely lucrative one at that with a multi-million dollar compensation package) to prepare Lachlan for the eventual death or retirement of his father, in which case he would take over as President or CEO (or both) of the company.

Shareholder concerns are starting to bubble, according to London’s Guardian Unlimited newspaper. They are rightly concerned with what seems to be growing nepotism at the company and that will only increase as 32-year-old brother James Murdoch, with no real management experience of a major company, is seen as the likely successor to Murdoch now that Lachlan’s resigned effective Aug. 31.

Update: When I initially posted, it was noted James had no experience. This was in 2003 following his nepotistic-like appointment to head BSkyB, Britian’s largest privately-owned TV network owned by News Corp.

IndustryBrains bought by Seattle-based Marchex

The Kelsey Group: “Seattle-based Marchex, which is the parent of TrafficLeader, the SEM/SEO firm behind several YP (and newspaper) simplified search marketing programs, has announced the roughly $30 million acquisition of IndustryBrains, which operates a vertical/contextual ad network.”

Relatively little press has been given to Seattle, Wash.-based Marchex’s acquisition of pay-per-click contextually-targeted advertising network IndustryBrains in the mainstream online media; however, The Kelsey Group equity research analyst Greg Stirling describes the rationale the best. As Stirling points out, the reason behind the $30.6 million cash-and-stock buyout is to increase the quality and vertical targeting of its proprietary search-distribution network. Marchex owns a collection of more than 100,000 domain names that it acquired when it purchased Name Development Ltd. for more than $160 million in March 2005, in which it sets up standard template-looking Web sites (like this one) full of vertically-targeted paid listings and sponsored search results. By adding contextually-targeted text-based ads to that network, it should be able to have higher relevancy and subsequently command a higher ad rate from advertisers. Name Development pioneered the so-called “direct navigation” business, buying up premium generic- and dictionary word-based domain names as well as common misspellings of popular words as domain names and then targeting the heck out of those assets through the aforementioned advertising methods.

Additionally, Marchex also owns paid and guaranteed inclusion search marketing network Enhance Interactive as well as the recently acquired assets of Pike Street Industries Inc., including the “yellow.com” and “whitepages.net” online people and business search Web sites.

So, all around, it’s an acquisition that makes sense and Marchex has a lot of synergy with which it can build upon – mixing all of its combined assets to create one, online marketing powerhouse.

Footnote: Name Development Ltd. reportedly made $20 million in ad sales in its most recent fiscal year prior to the Marchex buyout, with three employees and an 80% or greater profit margin. Marchex, which had been unprofitable until that buyout, instantly became profitable and is now reaping the rewards. So, it’s a very, very lucrative business.

Telus blocked its union’s Web site

Future not so friendly (Edmonton Sun): “Telus has blocked access to a union-run website, claiming it posted confidential information and was attempting to harass and intimidate workers by publishing their pictures.”

I’m grossly disturbed with the news that my Internet service provider, Telus, blocked my right to visit any Web site that I desire to read, uncensored, unedited, and unrestricted.

Drew McArthur, vice-president of corporate affairs for Telus, confirmed the blockage. Despite McArthur’s claims of the union posting photos of Telus managers and senior staff crossing picket lines to work in light of the union’s strike on TWU-produced Web sites, it makes no difference. As a provider and purveyor of a telecommunications service, they have no right to block access to Internet content regardless of the fact that it may be illegal or something with which they disagree. To do so is, in fact, the kind of thing that Communist China does when it restricts its citizens’ access to North American-based search engines like Google or Yahoo! in an attempt to control the flow of information Chinese Web surfers receive.

Shame on Telus, and despite McArthur claiming, in the linked news article above, its service agreement with customers allows this, it is not right. I urge the Canadian Radio-television Communications Commission to investigate and fine Telus severely for this truly shameful act.

For the record, prior to this act by Telus, I took no position on the union’s strike and the contract that Telus is trying to impose on members, with its retroactive lump-sum pay increases and future cost-of-living 2% annual raises, seemed fair though I did not agree with the way Telus went about trying to get the contract to members. However, in light of this grave development and the even worse fact Telus spokespeople were caught red-faced in trying to cover it up and spin it, I’ve lost all remaining respect for Telus and am now firmly on the side of the TWU.

IAC completes acquisition of Ask Jeeves

IAC Completes Acquisition of Ask Jeeves: “IAC/InterActiveCorp (Nasdaq: IACI) today announced the successful completion of its acquisition of Ask Jeeves, a leading provider of information retrieval technologies, brands and Internet advertising services.”

As I previously reported in late March 2005, Barry Diller’s company IAC was proposing a $1.85 billion all-stock deal to acquire Ask Jeeves, Inc. The reason IAC wants Jeeves is because it was the last remaining major Web portal that they could use to tie IAC’s myriad of online real estate together, a long ambition of Diller since USA Networks’ (the predecessor company of USA Interactive, later renamed IAC/InterActiveCorp) multi-billion dollar proposal to buy Lycos, Inc., in 2000 was thwarted by an $11+ billion merger offer from Terra Networks SA that created Terra Lycos SA. (Terra has since gone back to the Terra Networks corporate moniker and sold off Lycos last year to Seoul, South Korea-based Daum Communications Corp. for under $100 million in cash.)

The deal makes sense; however, I have three suggestions for Ask Jeeves management. First, you’ll need to completely redesign your iWon and Excite Web portals if you plan to retain their popularity (and Web traffic) and ultimately increase that traffic. The sites are littered with pop-up ads, especially iWon where some pop-up ads manage to evade every pop-up blocking tool imaginable. You must do away with this advertising medium. Second, the site designs come across as simplistic and archaic. It’s time to spice things up, making the designs unified across each portal’s pages, rounding corners, antialiasing logos, and changing the colour scheme. Finally, while you’ve got decent products in terms of the MyJeeves personalized and archival search service, Ask Jeeves Desktop Search as well as Bloglines feed aggregation and management, you need to update the layout of the wire news aggregation pages of Excite, iWon, and MyWay and add RSS feeds for each news source and content type.

MySpace goes to Murdoch’s News Corporation

News Corp to buy Intermix for $580 million on Yahoo! News: “News Corp. on Monday said it would buy Intermix Media Inc., owner of the popular MySpace.com social networking site, for $580 million in a move to expand the media conglomerate’s Internet offerings.”

Absolutely stunning, and thrillingly, good news to happen in the online social networking and blogging space. A lot has been said on this deal so I’ll make my own thoughts brief.

News Corp. is buying Intermix Media, which separately announced today it would buy the 47% of closely-held MySpace Inc. it did not already own, solely for its MySpace property. MySpace.com generated 15.5 million unique visitors in May 2005 and was the 38th most visited Web property, according to ComScore Media Metrix. That’s almost as many as its parent company, Intermix, which had 16.4 million unique visitors across the rest of its sprawling array of Web sites and Intermix ranked 32nd. So, simply put: MySpace was almost as popular of the combined sites of its parent, which is some serious traffic. Because of its viral nature and the fact people put out vast amounts of their personal information online to the public on their profile pages, it’s sure to please advertisers which covet that key 18-34 demographic, which is even harder to reach than the broader but equally popular 18-49. Together, Intermix and MySpace combined are a Top 10 Web property so I would say $580 million in cash is more than reasonable for the company formerly known as eUniverse, Inc., and bled huge amounts of money when online advertising dollars dried up after the dot-com crash, was the subject of a bitter proxy war of words with its former CEO and significant shareholder, and managed to survive it all and is now said to be hugely profitable.

Murdoch’s News Corp. also wants MySpace because it has been hugely successful for both up and coming musical artists looking to freely tout and their indie compositions to the world but also for established recording label-backed artists such as the Black Eyed Peas or R.E.M. News Corp. owns a recording company (or several) and by being able to own the medium in which people listen to, buy, and download music will prove immensely popular and valuable.

Separately, both Intermix CEO Richard Rosenblatt, a turnaround artist, and MySpace CEO Chris DeWolfe will retain their positions post-acquisition and join Fox Interactive Media, led by Ross Levinsohn, the companies said.

Other companies within the Intermix fold include: Alena, a company that produces, sells, and markets (through MySpace and other Intermix properties) products such as wrinkle reduction cream, weight loss and body toning cream, and a veterinary supplement designed to make dog food more “tasty and nutritious” and Intermix Network. Within Intermix Network, the Web properties include: gaming and entertainment site Grab.com, which includes GameRival; FlowGlo which offers cartoons, jokes, parodies, crossword puzzles, and other viral content; MadBlast; SmilePop; greeting e-card sites PerfectGreetings, CastleMountains.com, and FunnyGreetings; inspirational self-help sites Self Network and Quick Inspirations; and, last but not least, CoolQuiz.com. It had sold private-label online gaming distributor SkillJam to SkillJam Technologies Corporation, a U.S.-based wholly-owned subsidiary of FUN Technologies PLC, a British corporation that trades on the Toronto Stock Exchange under symbol “FUN”.

Orchard Park Mall suffers sans Wal-Mart

It appears, according to a published news report in Friday’s Capital News by contributor Jason Luciw, that despite the continued spin from Orchard Park Mall administration, Kelowna’s venerable mall is suffering. Two anonymous store owner-managers, who declined to be identified as they’re trying desperately to renegotiate high lease rates because of the downturn in traffic in the six-month period without Wal-Mart as an anchor tenant, said their sales are down 20%.

This is despite the continued line from the Oxford Properties Inc., which manages the mall under contract for mall owner Primaris Real Estate Investment Trust, administrative team assigned to Orchard Park Mall who are consistently quoted as saying overall traffic through various mall entrances is up more than 5% year-over-year and that Wal-Mart didn’t matter anyway – since the Wal-Mart shopper is different than the high-end, fashion conscious shopper who typically frequents the mall.

That last part doesn’t wash with this armchair pundit. Wealthy people may look for high-end merchandise and enjoy shopping at boutique stores, true, but they’re also frugal and love a bargain. The fact is, they do shop at Wal-Mart (in addition to the mall). With Wal-Mart gone, they have less incentive to visit the mall as frequently and may only go during seasonal peak times (back to school rush at the end of August, Christmas, Valentine’s Day, and early spring).

The frequent rumour that Gap Inc. discount, trend-setting clothing retailer Old Navy is to move in to all, or part, of the old Wal-Mart store appears to be just that – a rumour. I don’t see Old Navy wanting into the mall unless the leasing personnel with Oxford are willing to (a) renegotiate the lease for its already-present Gap store on more favourable terms for the merchant and (b) entice Old Navy with a sweetheart lease deal. And, I don’t see Primaris giving the go ahead for Oxford to do that, given that they recently made their prized portfolio asset Orchard Park Mall highly leveraged, using it as collateral for a series of several hundred million dollar loans, private placements, and debt-financing related activities it secured to buy a bunch of prized strip malls across Canada. They want as much revenue as they can muster and don’t want to be giving away any “sweetheart deals.”

Lastly, I don’t see the empty shell that is the old Wal-Mart store being redeveloped for at least another year, sometime in the late spring or early summer of 2006.

The fuss over outreach services on Kelowna’s Leon Avenue

A lot of ink has been splashed on the pages of Central Okanagan newspapers the past couple of weeks on the decision taken by Interior Health Authority to open an outreach service office and dirty needle safe drop-off and exchange on Kelowna’s Leon Avenue two doors to the west of the Kelowna Drop-In and Information Centre. Critics, including several downtown businesses and their trade group, the Downtown Kelowna Association, claim it is ludicrous to add more social programs for the “down and out” and drug-afflicted in the same concentrated area where they’re busy busting up homeless people with drug or alcohol problems using draconian, heavy-handed enforcement measures while verbally championing the so-called Four Pillars approach but coming up far short in terms of actually delivering.

The only thing ludicrous is the absolute sheer lunacy of the DKA’s argument. To Clint McKenzie, Executive Director of the DKA, how would separating the services all throughout the city so that a person has to go to the Gospel Mission in say, its possible new North End location, for a hot meal and shower, then taking a bus back to Queensway and walking multiple blocks to the Drop-In Centre for counseling and Internet access services and then taking several buses out to say, a sparsely populated lot in North Rutland or Ellison to dispose of a dirty needle and get a clean one make sense? Under your proposal indicated in the Kelowna Daily Courier on July 4th, 2005, and previously, that’s quite possible how things could turn out.

The bottom line is: no one wants outreach services and programs designed for the homeless, mentally ill, and drug or alcohol dependent persons in their neighbourhood. However, we cannot be inconveniencing the poorest and most downtrodden persons in society by requiring them to take multiple user-pay services (especially when they can least afford it) to get to all the destinations they need to go to stay healthy, stay alive, and ultimately improve their lives and turn themselves on the path to happiness and wholesome goodness. If we are to achieve the ultimate goal of integrating them into society and making them truly productive, we must learn to integrate the services they need today into our own lives and streets to help them succeed in the future.

By placing this outreach service and needle exchange, presumably to be operated by Interior Health itself and which replaces a previous service on nearby Lawrence Avenue run by the Boys and Girls Club of Kelowna, in close proximity to the Drop-In Centre, the Gospel Mission, downtown church, Community Futures Development office and Come C Restaurant, we keep these services in one well-functioning hub and help to achieve that goal.

Besides, let us not forget that in addition to providing essential health care services through its hospitals and long-term care facilities, another responsibility of Interior Health is acting as regional public health and safety regulator. It needs to ensure the safety of drug-afflicted users by providing essential clean needles to reduce the spread of disease and infection amongst themselves, but also for the general public. IH is making a bold, but necessary, move. I must admit, I was a bit surprised that the stodgy and overly bureaucratic local public health care provider was taking such a proactive approach by providing first-stage harm reduction services to those in need. It’s taken the necessary leadership and first steps. Now it’s time for the City of Kelowna and Regional District of Central Okanagan to show some backbone and follow-through by providing similar-themed services – and cash to keep the programs running. A good place for the two local governments to start would be to provide substantial long-term funding to allow the Iridian Youth Detox Centre, operated by Okanagan Family Society, to re-open and ultimately expand.

To the businesses that are not happy with this outcome and can’t see it in themselves to integrate these desperately needed outreach services into their neighbourhood, I can only pen that perhaps the best thing for them to do is leave the area. They should pack up shop and relocate, if they aren’t willing to contribute to solving the current problems downtown. The truly strong-willed, compassionate, and determined businesses will stay, survive, and hopefully prosper.