News Corp. to acquire real estate listings site
News Corp., the publishing company controlled by Rupert Murdoch, agreed Tuesday to buy Move Inc., an operator of real estate listings websites, for $950 million in cash, as the newspaper publisher continues to branch out into new businesses.
The transaction is the latest, and largest, by Murdoch’s publishing arm since it split from 21st Century Fox last year. Under the terms of Tuesday’s deal, News Corp. will pay $21 a share through a tender offer for Move’s stock.
Facing steep declines in advertising and subscription revenues, News Corp. is trying to stretch beyond newspapers like The Wall Street Journal. News Corp. paid $415 million this year to take control of Harlequin Enterprises to add the well-known publisher of bodice-ripping romance novels to its HarperCollins publishing division. News Corp. also paid $25 million in 2013 for Storyful, a social and video news agency.
“This acquisition will accelerate News Corp.’s digital and global expansion and contribute to the transformation of our company, making online real estate a powerful pillar of our portfolio,” Robert Thomson, News Corp.’s chief executive, said in a statement. “We intend to use our media platforms and compelling content to turbocharge traffic growth and create the most successful real estate website in the U.S.”
When it separated from 21st Century Fox, which houses Murdoch’s lucrative television and film assets, News Corp. was given $2.6 billion and no debt. And it has deployed some of that cash as it seeks to tap into new revenue sources. Total revenues at the company declined 4 percent to $8.6 billion in the year ended June 30 compared with the previous year. Revenues in the news and information group, its largest business unit that includes The Wall Street Journal and The Sun, dropped 9 percent to $6.2 billion compared with the same period a year earlier.
Long a pillar of the traditional newspaper industry, real estate print ads have eroded with the emergence of new digital outlets. Global ad spending on newspapers is expected to fall 2.9 percent in 2014 to $73.5 billion, the seventh straight year of declines, according to WPP’s GroupM. In contrast, spending on the online real estate market is steadily increasing.
The Move deal is expected to jump-start News Corp.’s current real estate services business, which delivered $408 million in revenues to the company in the year that ended in June, up 18 percent from the previous year.