Rebekah Brooks joining Storyful: A new digital direction for Rupert Murdoch's News Corp empire?
An interesting story snuck out onto the news wires over the weekend that rather intrigued me. What got me thinking, first of all, was how under-reported – at least until Monday morning – the story was, especially given the company and principals involved.
Rupert Murdoch and Rebekah Brooks
According to a piece buried on the inside pages of The New York Times, Rebekah Brooks, one-time editor of The Sun, News of the World and former boss of Rupert Murdoch’s publishing company News UK [formerly known as News International], is about to make a return to the Murdoch empire.
The erstwhile editrix, a Murdoch favourite, has been keeping a very low profile in the eight months since she was acquitted of phone-hacking and of making payments to public officials. It was widely rumoured that she had received over £16m from her previous employer in compensation for loss of future earnings, because it was assumed that she would never work for News UK again – or indeed any British media or newspaper company.
Despite this, and the ongoing trials of various Sun and NoTW journalists, Murdoch has continued to be loyal to his former UK chief, and she was last spotted at January’s Consumer Electronics Show in Las Vegas as part of the sizeable Murdoch contingent.
So, assuming the NYT story (variations on which appeared in The Mail on Sunday and the FT) has some merit – and there has yet to be any official comment – what could Brooks be returning to do?
I think we can rule out a job as a newspaper executive, but the Times did focus on a vacant job, and one that’s rather intriguing. Back in 2013, Murdoch acquired a small Irish company named Storyful for $25m. Storyful was set up in order to monitor social media for newsworthy content.
It has an interesting way of working: the monitoring of social media is largely automated, as you’d expect, but the selection and verification of stories is done by journalists. The content is then acquired and sold on to newsrooms around the world; it’s a kind of Reuters or Press Association for the social age. Data regarding who’s talking about what can also be sold onto brands in real-time, as valuable business intelligence.
It’s a nifty idea, and one can see why wily Murdoch acquired it. According to the rumours flying around what used to be Fleet Street, Brooks will be heading up Storyful, working from the UK, but not based at News UK’s new HQ by the Shard in London Bridge.
Even more interesting is the suggestion that Brooks will be seeking out new digital investments.
Despite being one of history’s most astute and successful media moguls, Murdoch and his organisation have never really ‘got’ digital. The newspapers in the empire have largely been successful over the past 50 years, as have the TV companies (think Sky, Fox and Star TV). But for all of Sky’s and The Sun’s stunning ‘old media’ successes, there have been too many digital embarrassments – such as buying MySpace for an inflated $580m in 2005, only to sell it (after years of losses and haemorrhaging members) for a reputed $35m. And then there’s the flop iPad newspaper The Daily.
The only major new media investment the company has made in recent years that seems astute is the 5 per cent stake subsidiary 20th Century Fox made in that darling of the new media age, Vice Media.
In addition, some observers have maintained that Murdoch’s decision to put his UK newspapers behind internet paywalls has not been successful, and that they have a fraction of the readers they had when they were free (although no independently-audited figures are available, so we cannot be sure of those assertions).
But over the past few months, News Corp has been hoovering up digital assets, none of them particularly associated with media. These include an Indian education start-up, Big Decisions and a sizeable stake in an Indian real estate agency, Proptiger. A reputed $950m is about to be spent on Move, Inc., which operates move.com, a US equivalent of sites like Prime Location or RightMove.
Perhaps News Corp is considering branching out into estate agency and going into battle against Foxtons? Maybe! Seriously, however, these recent acquisitions seem to indicate a different tack, with an emphasis on fast-growing new areas of business, rather than paying over the odds for tired or short-life properties like MySpace.
Storyful in particular seems ripe for further development, because it represents a ‘new media’ way of working, but which can draw on News Corp’s long heritage in ‘old media’.
What looks like a new strategy of buying start-ups, as opposed to paying hundreds of millions (or even billions, in the case of Dow Jones, or the rumoured Time Warner bid of last year) is interesting too. Small startups represent a comparatively small risk for a company the size of News Corp, and with appropriate investment, they can be developed into far larger entities.
The real estate businesses are interesting as well. Scores of industries, from newspapers and music to booksellers and broadcasters have been disrupted by the internet – the realtor (as Americans call estate agency) industry is only just beginning to be so. It’s perhaps no exaggeration that in 10 or 20 years’ time, the familiar estate agent may have all but disappeared from the high street.
Estate agencies, especially in overheated and highly competitive markets such as those found in much of the UK, are ideally suited to moving entirely online, particularly because values and sales can be monitored in real-time. There is already some capacity within the Murdoch organisation to do this: the company owns Dow Jones and provides financial information in real-time, so the idea of News Corp as realtor isn’t so far-fetched.
Murdoch, for once, is in fairly early (although News UK’s great rivals, Daily Mail & General Trust, already has a stake in the realtor site Zoopla) and helping to disrupt a multi-billion dollar industry may suit his legacy ambitions – after all, the old maverick made his name and reputation shaking up first newspapers and then television. So why not add real estate to this list?
Andrew Moss is a partner at Green Square, corporate finance advisors to the media and marketing sector