News Corp. Chief Executive Robert Thomson on Monday revealed the secret to the multinational publishing corporation’s continued success following its split into two publicly traded companies in 2012 — Harlequin romance novels and the acquisition of realtor.com.
Speaking during Deutsche Bank’s 26th annual “Media, Telecom & Business Services” conference in Palm Beach, Thomson attributed the company’s financial stability amidst a roiling media industry to the 2014 acquisition of Harlequin Enterprises, the Canadian publisher of romance novels, and the purchase of realtor.com parent company Move.
“That was a significant investment,” Thomson said, referring to the realtor.com acquisition. “Folks in the digital world were rather skeptical about it, but I think it’s fair to say that we turned what was the number three company into a very strong number 2 and, depending on the quarter, depending on the metric, in some quarters the fastest growing. Obviously we’re in a competition, long term, to be number one, but that was what you might call a counter cyclical — if not counter cultural — investment, and the team has proved the naysayers wrong.”
In February, News Corp. reported $2.18 billion in revenue, up 3 percent from $2.12 billion the year prior, and a net loss of $66 million, an improvement over its $212 million loss the year prior. A one-time charge of $174 million due to the new U.S. tax legislation largely contributed to the company’s net loss, according to executives during the quarterly report.
The company’s digital real estate services, which include realtor.com and Australia-based REA Group, posted a 21 percent year-over-year increase of $50 million, and a 25 percent EBITDA (earnings before interest, taxes, depreciation and amortization) increase of $24 million.
Realtor.com, which counts Zillow and Redfin among its competitors in the growing listing portal market, drew 6.09 percent of all traffic to real estate-related websites in January, according to Experian Marketing Services, which tracks desktop computer activity. Zillow and Trulia led the pack with 9.17 percent and 7 percent market share, respectively.
Thomson also commented on real estate sales more broadly, offering a kind of “Goldilocks” view of how long listings should sit on the market.
“Markets aren’t difficult to read,” Thomson said during the opening day of a three-day conference that included speakers from Morgan Stanley, Shutterstock, Pandora and other media and tech conglomerates. “It’s kind of common sensical in a way. You don’t want properties to be too hot, because it means the duration of the listing is too short and your ability to leverage that listing is lessened. On the other hand, you clearly want some movement in the market because you don’t want the property sitting on the market unsold for 18 months.”
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