The global media mogul jetted into London yesterday to unveil a new partnership with Japan's Softbank and proclaim a belated conversion to the wired revolution. News Corp's recently established Internet firm, epartners, and Softbank launched a $50m startup called eVentures that is to facilitate the introduction of US-based Internet companies to the UK, New Zealand, Australia and India. Set up with funding of $300m, epartners will invest a further $100m in Softbank Capital Partners Fund.
Softbank, founded by Masayoshi Son, considered to be Japan's answer to the Microsoft billionniare Bill Gates, owns stakes worth $18bn in over 100 Internet companies. His chief asset is a 28 per cent stake in the portal company Yahoo! that cost $100m in the mid-Nineties but is now worth $10bn. eventures also announced its first deal, a $22.5m investment in the UK affiliate of E-Line, a California-based Internet mortgage company whose shares rocketed 170 per cent to $38 on its first trading day on Wall Street on Wednesday. The joint venture will own 45 per cent with other investors, including Softbank, holding the remaining equity in E-Line, which will also expand to Australia, New Zealand and India.
With the zeal of a true convert, Mr Murdoch predicted that more than half of News Corp's market capitalisation, currently about $40bn, would eventually be related to Internet operations. "Every part of our company is transforming itself to the new realities sweeping the world," he said.
Only last year, the News Corp chief derided the valuations of Internet companies. Since then, however, those values have continued to soar.
Last month, News Corp launched epartners with former BSkyB chief executive Mark Booth at the helm and an investment pool of $300m. Since then, Bruce McWilliam, formerly a close adviser to Mr Murdoch on corporate strategy, has joined the start-up.
"We needed a way to step into the small, fast growing companies that are building the Internet," said Mr Murdoch. "E-partners does that."
Softbank yesterday also launched a parallel European deal with French conglomerate Vivendi to help US Internet companies build bridges to the continent. Vivendi holds a 17 per cent interest in BSkyB and controls French pay-TV operator Canal Plus. Yesterday Mr Murdoch scotched speculation that the pay-TV companies would ever merge. "I think we learnt that BSkyB was a great British asset and we don't intend to let it become a football for French politicians," he said.
Mr Murdoch's embrace of the Internet also extended to warm statements about Microsoft, even though the software company is the leading investor in Sky's bitter rival, the UK cable sector.
"We have a very good relationship with them, but we've never sat down and done any business," he said. That goodwill didn't extend to ONdigital,which has refused to allow ITV and ITV2 to be distributed on BSkyB's satellite network. "We're doing it out of compulsion," Mr Murdoch said commenting on BSkyB's premium sports and movie channels being available through ONdigital. "If the authorities believe in a level playing field, they'd compel them," he added.
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