News Corp puts its faith in revenues from new media

News Corporation’s redesign of the Wall Street Journal website and more effective marketing of Dow Jones digital products will boost subscriptions by more than $300m a year, Rupert Murdoch has predicted.

Murdoch told investors at a Goldman Sachs conference in New York that the Dow Jones digital assets, which he bought last December, had been “crazily undervalued and grossly undersold”.

News Corp is relying on cable networks such as Fox News, Sky Italia and the Fox Interactive Media group, which includes MySpace, to offset weaknesses in advertising at newspapers and local TV stations.

Murdoch said there had been “almost no cancellations” by advertisers on the Fox network so far.

Murdoch said Wall Street Journal’s website could generate more than $100m in online advertising, and that he would like fewer but more expensive adverts on MySpace, the social networking site. “MySpace is going to be a great profit driver,” he said.

But he warned that advertising revenues at Dow Jones print outlets, including the Wall Street Journal, would slip by $3m to $642m this year, with the turmoil in the financial markets making it hard to achieve higher rates for products such as Factiva.

News Corp’s local TV stations were suffering from a dip in advertising, he said, because 30% to 40% of it came from the automotove sector, which has cut spending by about 40% this year.

News Corp shares have lost more than a third of their value this year.