News Corp. Says Business Strong, Sees End to Journal Web Fees By LYNDAL MCFARLAND November 13, 2007 9:14 a.m. ADELAIDE, Australia -- News Corp. Chairman Rupert Murdoch said Tuesday the company has seen a strong start to its fiscal second quarter and is currently tracking ahead of guidance. Mr. Murdoch also said he expects to scrap subscription fees for The Wall Street Journal's Web site, WSJ.com. The Web site is one of the few news sites globally to successfully introduce a subscription model. News Corp. has agreed to acquire Dow Jones & Co., publisher of the Journal. The deal is expected to close in the fourth quarter. On WSJ.com, Mr. Murdoch said, "We are studying it and we expect to make [the site] free and, instead of having one million [subscribers], having at least 10 million-15 million in every corner of the earth." He said he believes that a free model, with its increased readership, will attract "large numbers" of big-spending advertisers. Speaking to Australian shareholders in Adelaide, the South Australian city where he started News Corp. from a newspaper he inherited from his father, Mr. Murdoch reiterated the group's full-year forecasts and said U.S. advertising demand held up well in October. "This quarter...we are going very well and very strongly," Mr. Murdoch said. He said the group still expects full-year operating income to show percentage growth in the low teens, but while the group was currently tracking ahead of that level, Mr. Murdoch said it was too early to increase forecasts. The group hasn't seen any negative impact from the issues which precipitated the U.S. subprime mortgage market meltdown earlier this year, but said if the advertising market were to be hit, the impact at the group level wouldn't be huge. Around 23% of News Corp.'s earnings come from the U.S., and Mr. Murdoch said it wouldn't be "fatal" to see a 10% drop in advertising in the U.S. market as a whole. Its assets in the U.S. include the Fox cable business, the 20th Century Fox film studio and the New York Post. It also owns the MySpace social networking site. Outside the U.S., it owns a raft of newspaper and television assets, including London's Times newspaper and a stake in Britain's BskyB. Earlier this month, News Corp. said net income for the first quarter ended Sept. 30 fell 13% due to tough comparisons, but revenue rose 19%. Mr. Murdoch said the group continues to monitor smaller acquisition opportunities, particularly in fast-growing economies such as those in Eastern Europe. However, he said free-to-air television assets in Australia are too expensive and he wouldn't be interested at current prices. In addition to the Journal, Dow Jones publishes Dow Jones Newswires, Barron's, the Far Eastern Economic Review, MarketWatch, Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones owns Factiva and co-owns SmartMoney with Hearst Corp. It also provides news content to CNBC television operations world-wide and to radio stations in the U.S. http://online.wsj.com/article/SB119496001563491328.html?mod=hpp_us_whats_news