Massive media conglomerate News Corporation will spend over half a billion US dollars to increase its internet presence with the purchase of Intermix Media, a company with a network of websites devoted to entertainment, gaming and social networking.
News Corp signed a definitive agreement to buy Intermix for about US$580 million (NZ$855 million) in cash, a transaction that the parties expect to close in this year's fourth quarter and that is subject to certain conditions, including the approval of Intermix stockholders.
With the addition of Intermix's more than 30 websites, News Corp will almost double its US web traffic to more than 45 million unique monthly users, News Corp said in a statement.
The Intermix web properties, which include the social networking sites Grab.com and MySpace.com, will become part of News Corp's Fox Interactive Media Unit.
Intermix had revenue of US$79 million in fiscal year 2005, ended March 31, 2005, up from US$52.9 million in the previous year. Net income in fiscal year 2005 came in at US$4.5 million, compared to a net loss of US$13.1 million in fiscal year 2004.
In June, Intermix announced it had reached an agreement in principle with the Internet Bureau of the Office of the New York State Attorney General to resolve a pending lawsuit related to adware distribution.
The proposed settlement calls for Intermix to pay US$7.5 million over three years to the State of New York, and to permanently discontinue distribution of its adware, redirect and toolbar programs, Intermix said in a statement last month.
Prior to the proposed settlement, Intermix had ceased distributing the programs in question, which the company describes as being part of a "legacy business" it is no longer involved in. Intermix isn't admitting any wrongdoing or liability in the proposed settlement.
News Corp produces movies and television shows and publishes magazines, books and newspapers. It owns, among others, the 20th Century Fox movie studios, the Fox Broadcasting television network, the DirecTV satellite television provider, the US TV Guide magazine, as well as newspapers such as The Times and the New York Post.
Neither News Corp nor Intermix immediately returned calls seeking comment.