Last week’s purchase of Intermix Media by Rupert Murdoch’s News Corporation – for a cool US$580mn – is seen as evidence of a growing scramble on the part of traditional broadcasters and media providers to cement their positions online. The deal for Intermix Media, the soi-disant “largest multi-category online entertainment network”, followed hard on the heels of Murdoch’s creation of the new Fox Interactive Media unit.

If that move was dismissed by some observers as mere ‘window dressing’, Murdoch has now splashed out on some pretty expensive curtains to complete the job.

Broadcasters the world over tend to be pretty heavy investors in the web, with sites linked to news channels being among the most frequently visited of all. Many analysts interpret recent deals like this as further evidence that broadcasters feel under increasing threat from the Internet’s potential as a distribution channel for information and entertainment services that have until now been the preserve of conventional broadcast media.

Although not yet capable of delivering the quality or quantity associated with multi-channel TV, the web is catching up fast at the pace determined by our old pal, Gordon Moore (click here). In other words, if not today, nor tomorrow, then any time soon.

Seen it all before?
Ground-breaking developments should always be placed in context, however. In this case, several aspects of the that context feel familiar from the worst mistakes of the first-generation dot.com boom. Here are five examples:
• herd instinct: News Corp appears have been spooked into action by its rival Viacom. On 12 July, Viacom’s CBS News announced plans to create “a 24-hour, multi-platform digital news network, bypassing cable television in favor of the nation's fastest-growing distribution system – broadband.” It even dubbed the move a ‘cable bypass strategy’ designed to establish “a 24-hour, on-demand news service.” The Fox Interactive Media announcement and Intermix acquisition soon followed, suggesting that Murdoch was responding to analysts at the shallower end of the financial markets (wholly appropriate where stations such as Fox News are concerned, some would say).
• price: US$580mn looks pricey; News Corp is paying US$12 month per share, compared to a 3-month low of less than US$4 per share. That’s a classic dot.com-era response on the part of desperate buyers and eager sellers which results in an inflated price. At least, unlike during the events leading up to the dot.com meltdown, News Corp is paying cash.
• language: "Intermix's brands, such as MySpace.com, are some of the web's hottest properties and resonate with the same audiences that are most attracted to Fox's news, sports and entertainment offerings. We see a great opportunity to combine the popularity of Intermix's sites, particularly MySpace, with our existing online assets to provide a richer experience for today's internet users", riffed News Corp’s 74-year old chairman and ceo, presumably speaking as owner rather than consumer of MySpace.com’s.
• poachers/gamekeepers: as usual there is a sense of coats being turned by self-styled new economy pioneers. “We are very excited to combine our unique Internet reach and assets with one of the most exciting media companies in the world. We look forward to continuing to lead the market in unique content, social networking, and analytical marketing,” said Richard Rosenblatt, Intermix Media’s CEO. This from a company that may well have started out humming tunes of ‘new paradigms’ and ‘death to the dinosaurs’ as it built up its business.
• if you can’t beat them, buy them: in all convergent transactions of this type, the corporate hype implies that a gap has been filled, a problem solved, a threat nullified. In fact, these deals only mark the point at which the hard work begins, guaranteeing cost but by no means guaranteeing success  (think AOL-Time Warner).

All in all, it looks like a good if relatively insignificant deal for News Corp. Perhaps.
Jim Chalmers