Stephen’s Posterous

It has been reported that former MySpace COO Amit Kapur has raised $10 million in its first round of funding. Redpoint Ventures and August Capital jointly lead the round. David Hornik from August and Geoff Yang from Redpoint have joined the board of directors.

The company was founded by Amit Kapur, Steve Pearman, former MySpace SVP Product Strategy, and Jim Benedetto, former MySpace VP Technology. TechCrunch reported that the company still does not have a name. Mr. Kapur and Mr. Benedetto both left MySpace in early March 2009. Mr. Kapur left only a month after being promoted to the COO. Many thought this would lead to a mass exodus at MySpace.

TechCrunch says that there is little that anyone knows about the company, but that the company is supposedly targeting the message board and Internet forum space with technology that aggregates content and serves advertising against it. Real time search may be part of the business plan as well.

Michael Arrington of TechCrunch says:

Whatever this thing is called, and whatever it does, I know one thing - I like the team. These were three of the most respected and creative execs at MySpace. Keep an eye on them.

On TechCrunch's comments section, Sanjay Sabnani from CrowdGather, Inc. said:

Finally, someone from the establishment recognizes what a huge opportunity the forum space is. While my company has less capital, my hope is that this attention will benefit us since we are already in this space and unlike Amit and his team…we come from forums.

Another comment on TechCrunch's comment section said:

There’s a ton of value in forum content. Terabytes of real niche information and highly engaged users generating more every day...I don’t like to count out anyone with a great new idea, though this is one crowded space. So they’d better have something great. If they’re doing some search, there are several key players out there doing search in forums....BoardReader.com, Omgili.com and sort of Boardtracker.

Leaving Twitter by David Gelles, FT.com

The incessant media focus on Twitter, coupled with a parade of celebrity endorsers from Oprah to Lance has excited enormous public interest in the micro-blogging service. Eager to see what all the fuss is about, millions of people around the world are signing up to send their first "tweets". Unique users of Twitter grew by more than 100 per cent in March, and are now estimated at 14m.

But it turns out most of those users are determining that the fuss isn't about all that much, after all. A full 60 per cent of new Twitter users fail to tweet again the following month, according to David Martin, Nielsen vice-president of primary research.

Mr Martin makes the case that this strikingly low 40 per cent retention rate poses a significant obstacle to Twitter's long-term success. "A high retention rate doesn't guarantee a massive audience, but it is a prerequisite," he said. "There simply aren't enough new users to make up for defecting ones after a certain point."

Comparing Twitter with Facebook and MySpace, Mr Martin notes that when today's two dominant social networks were emerging, their retention rates were twice as high. "When they went through their explosive growth phases, that retention only went up, and both sit at nearly 70 per cent today," he said.

As Facebook adapts its service to mimic many of the most popular features of Twitter, these numbers give good reason to think that Facebook, with its 200m users and robust retention rates, has little to fear from the flurry of interest in Twitter.

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Taking Helm at MySpace by Jessica E. Vascellaro, WSJ.com

When Jonathan Miller, News Corp.'s chief digital officer, phoned Owen Van Natta to finalize his appointment as chief executive of MySpace last week, Mr. Miller offered the dealmaker the sort of job he had been seeking ever since he was elbowed aside at Facebook Inc. last year, people close to him say.

As the 39-year-old Mr. Van Natta sets out to turn around MySpace, Facebook's closest competitor, he can draw on more than a decade of Internet experience, including several years at Amazon.com Inc., where he hammered out partnership deals.

But MySpace, with more than a thousand employees and flat user growth is a challenge unlike any Mr. Van Natta has seen. His mission, handed down to him by his new boss, Mr. Miller, who joined News Corp. earlier this month, is to jump-start growth and recapture some of the buzz that MySpace once generated, people familiar with the matter say.

MySpace, based in Beverly Hills, Calif., remains the largest social-networking Web site in the U.S., but the gap is closing fast. In March 2009, it attracted 70.1 million unique U.S. visitors, down 3.6% from a year earlier, according to comScore Media Metrix. Meanwhile, Facebook, which has surpassed MySpace in world-wide users, grew 72% to 61.2 million unique U.S. visitors.

Mr. Van Natta, known for a blunt style that has caused friction with co-workers, is walking into an organization that analysts, advertising executives and former executives say has lost its focus and become bloated. Pali Capital analyst Rich Greenfield predicts massive cost cuts will be needed to align MySpace with its revenue. A spokeswoman for MySpace declined to comment.

People close to Mr. Van Natta say he has just begun digging into details of the Web site's operations. They say he has been reviewing organizational charts, and has some ideas to simplify the site and place more emphasis on its technology.

Mr. Van Natta is keeping his roughly 0.5% stake in Facebook, according to people familiar with the talks, a move recruiters say is fairly common in the tech industry, where executives frequently jump from company to company. A Facebook spokesman declined to comment on Mr. Van Natta's keeping his stake.

Conscious of his lack of technical experience, Mr. Van Natta has begun narrowing the field to choose a senior product person, say people familiar with his thinking. They expect him to hunt for engineering talent within Silicon Valley, where his family will be based for now.

Mr. Van Natta isn't likely to turn MySpace into another Facebook, these people say. He views Facebook more as a communications channel and MySpace as a destination, where people come to entertain themselves by discovering music and meeting new people, they say.

The executive landed at Facebook in 2005 following an introduction by Silicon Valley investor Ron Conway, among others. At the time, the site was a small group of mostly 20-somethings seeking an experienced hand to help them negotiate partnerships. Facebook Chief Executive Mark Zuckerberg brought Mr. Van Natta on as vice president of business development, promoting him to chief operating officer five weeks later, according to people familiar with the matter.

He focused first on recruiting. He also solicited bids for the role of third-party advertising provider, helping seal a crucial alliance with Microsoft Corp. But over time, his hard-driving personal style, an asset at the negotiating table, aggravated disagreements between him and Mr. Zuckerberg, who is also know for a stubborn streak, say people familiar with the matter.

The two sparred in 2006 over Facebook's refusal of a nearly $1 billion takeover offer from Yahoo in 2006, which Mr. Van Natta had helped negotiate, according to people familiar with the matter.

Mr. Zuckerberg told Mr. Van Natta that he felt he needed to build out his management team and wanted him to take on a different role, according to two people familiar with the matter. In August 2007, Mr. Zuckerberg made him chief revenue officer and elevated several other executives to a similar rank.

Mr. Van Natta played a key role in negotiating a new round of financing in 2007. At a dinner in his Palo Alto, Calif., home with Mr. Zuckerberg and Microsoft CEO Steve Ballmer, Mr. Van Natta played hardball, say two people familiar with the meeting. Soon after, Microsoft took a 1.6% stake in the company in a deal that valued Facebook at roughly $15 billion.

Mr. Van Natta left the company in April 2008, telling friends and colleagues he was leaving because he always wanted a chief executive job and was tired of the erratic schedules of 20-somethings, according to these people.

He chilled out in Santa Cruz, grew a beard and made a few small investments in start-up companies, friends say. He turned down an opportunity to head MySpace Music, say people familiar with the matter. Instead, in November 2008, Mr. Van Natta became CEO of music-streaming site Playlist Inc.

Mr. Van Natta continued to weigh other possibilities. He interviewed with News Corp. Chairman Rupert Murdoch about the chief digital officer position, according to people familiar with the matter. Several weeks later, after Mr. Miller was named to that post, he started conversations over dinner with him about the MySpace chief executive job.

Emily Steel contributed to this article.

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Founders Step Aside at MySpace by Juia Angwin and Emily Steel, WSJ.com

The founders of MySpace are leaving the helm of the pioneering Web site that made social-networking a mainstream phenomenon, as owner News Corp. seeks to reinvigorate the once-hot property it scooped up four years ago.

The stepping aside of Chris DeWolfe and Tom Anderson, whose contracts weren't due to expire until October, represents a pivotal test for the viability of social-networking sites. While social-networking sites such as MySpace and Facebook have exploded in popularity in recent years, they have struggled to generate the kind of revenue and earnings prospects that can sustain them as businesses over the long haul.

News Corp. now aims to show that a large conglomerate, with a portfolio that includes many old-media properties including newspapers, can succeed at that task.

People familiar with the situation said News Corp., was completing a deal to name former Facebook Chief Operating Officer Owen Van Natta as chief executive to succeed Mr. DeWolfe. He would report to Jon Miller, the former AOL chief executive who was recruited to join News Corp. this month in a newly created position of chief digital officer.

Charged with all News Corp.'s stand-alone digital properties, he was particularly given the mission of shoring up MySpace. Spokeswomen for News Corp. and MySpace both declined to comment beyond a news release. Messrs. DeWolfe, Anderson and Van Natta couldn't be reached for comment.

News Corp. sees MySpace as critical in its transformation from a conglomerate of traditional television, movie and newspaper businesses to a new-media titan. But while MySpace grew quickly following News Corp.'s purchase, last year its revenue fell short of executives' targets, according to people familiar with the matter. News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.

MySpace is still the dominant social-networking site in the U.S. But its U.S. audience has fallen this year. In March, MySpace attracted 70.1 million unique visitors, down 3.6% from a year ago, according to comScore Media Metrix.

Meanwhile, Facebook is nipping at its heels. Facebook surpassed MySpace's world-wide audience a year ago, and is growing fast in the U.S., with 61.2 million unique visitors in March, up 72% from a year earlier. Facebook also has made international expansion a priority, pressuring MySpace.

More broadly, MySpace, like other social-networking sites, still must overcome doubts about the medium's viability. Advertisers, for one, remain leery. "Advertising doesn't fit so neatly into a conversation that people are having among themselves," says Tom Bedecarre, chief executive of independent digital-ad firm AKQA. "The interruptive model of advertising hasn't been successful."

MySpace was founded in 2003 by Messrs. DeWolfe and Anderson. Their email marketing division of a Los Angeles company called eUniverse, which later renamed itself Intermix, was floundering, so they imitated a popular site at the time, Friendster.

They made two key improvements on Friendster: They allowed users to customize their profile pages, and they allowed users to create any identity they liked. Friendster, like Facebook today, encouraged members to use their real names.

But just as MySpace was taking off, fueled in large part by its popularity with musicians, it was sold to News Corp. MySpace's parent company, Intermix, negotiated the $650 million deal directly with News Corp., leaving the MySpace founders out of the loop until the last minute.

News Corp. Chairman Rupert Murdoch immediately sought to mollify the founders with lucrative two-year pay packages of $30 million each, but Messrs. DeWolfe and Anderson still chafed at the fact that MySpace ad sales were taken over by executives at Fox Interactive Media, according to people familiar with the situation.

The rank and file of MySpace was also angry that their stock options were canceled after the acquisition and that they were forced to move from Santa Monica to Beverly Hills, the people said.

Relations fell apart further. Mr. DeWolfe ignored suggestions from Fox Interactive Media President Ross Levinsohn about ways to improve the site. Mr. DeWolfe also sought to amend a $900 million advertising deal that News Corp. cut with Google Inc., delaying its implementation, the people said.

Mr. Levinsohn also clashed with Mr. Anderson, who is president of the site. Mr. Anderson controlled the product development and was criticized for not moving fast. In April 2006, MySpace bought the online karaoke service kSolo. MySpace launched the karaoke feature on its site in April 2008, two years later.

The tension between the MySpace founders and News Corp. eventually led to Mr. Levinsohn's dismissal in November 2006. He was succeeded by his distant cousin, Peter Levinsohn, who eventually gave Mr. DeWolfe control of the advertising sales at MySpace that he had sought.

All this time, Facebook was steadily gaining on MySpace. Founded by Silicon Valley computer programmers as a social network for Harvard students in 2004, Facebook expanded to other college campuses and opened to everybody in 2006. Facebook focused on building innovative features and encouraging third-party software developers to write applications to run on Facebook.

Meanwhile, MySpace, with its marketing and music background, fought back with entertainment, such as a celebrity news site and an expensive music joint venture.

Last April, Facebook edged out MySpace in terms of world-wide unique visitors and has continued to steadily gain in the U.S. Three top MySpace executives, including Amit Kapur, former chief operating officer, left the company in March to work on a start-up. MySpace has yet to name successors for those positions.

Mr. Miller began discussing the job with potential candidates including Mr. Van Natta, but hadn't finalized anything when the news of the talks leaked, according to people familiar with the situation.

Mr. Van Natta helped expand Facebook but stepped into a less prominent role as chief revenue officer as the site grew, ultimately leaving the company in February 2008. At MySpace, he could serve as a bridge between Silicon Valley and MySpace, which has struggled to match Facebook's technology prowess.

Hearing of the talks, Mr. DeWolfe offered to resign, these people said.

Jessica E. Vascellaro contributed to this article

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On the Internet, we are faced with the extreme choice of pretending to be a rock star on sites like MySpace, or building a single personality that suits all our audiences on sites like Facebook, LinkedIn or Twitter.

This is one of the paradoxes of the Internet age: the freedom of the Internet is also constraining. The image we project of ourselves online, what some academics call "unitary identity," becomes our defining image for all audiences. It does not allow us to shed a past identity or recreate ourselves, or to project different images to different audiences.

MySpace was founded partly as a reaction against the constraints of unitary identity on a hot Web site called Friendster. It was 2003, and Friendster had improved on the concept of building individual Web pages by allowing people to link their Web pages to those of their friends.

In the language of sociology, Friendster's innovation led to better online "signaling." The relationship between the signals we send about ourselves and our true selves are the topic of a social science called "signaling theory."

"Most of the qualities we're interested in about other people, Is this person nice? Trustworthy? Can she do this job? Can he be relied on in an emergency? Would she be a good parent? are not directly observable. Instead we rely on signals, which are more or less reliably correlated with underlying quality," Judith Donath and Danah Boyd wrote in BT Technology Journal in 2004.

Friendster allowed people to factor in a person's friends as part of the signal, leading to fuller and better signals. However, Friendster made a big mistake: It discouraged members from pretending to be someone they weren't. That meant no "Fakesters," people pretending to be Homer Simpson or God or Harvard University or a dog. It also meant no "Fraudsters," people pretending to be someone else, such as Britney Spears or their cousin Billy.

"The whole point of Friendster is that you're connected to somebody through mutual friends, not by virtue of the fact that you both like Reese's Peanut Butter Cups," Friendster founder Jonathan Abrams told the San Francisco Weekly at the time.

The "No Fakester" approach violated one of the Internet's central tenets, anonymity, best embodied by a Peter Steiner cartoon in the New Yorker from 1993 showing a dog in front of a computer screen with the caption, "On the Internet, nobody knows you're a dog."

To many, the power of anonymity is not a luxury but a necessity, the essence of freedom. By gathering online anonymously, people are free to find others who share their political views or their sexual orientation without fear of repercussion.

As a result, many of Friendster's users revolted. They decried the "Fakester Genocide" on Facebook and vowed to start a "Fakester Revolution." They wrote a revolutionary document, the "Fakester Manifesto."

The first declaration:

"Identity is provisional. Who we are is whom we choose to be at any given moment, depending on personality, whim, temperament, or subjective need. No other person or organization can abridge that right, as shape-shifting is inherent to human consciousness, and allows us to thrive and survive under greatly differing circumstances by becoming different people as need or desire arises. By assuming the mantle of the Other, it allows us, paradoxically, to complete ourselves. Every day is Halloween."

In the Fakester revolution, the founders of MySpace saw an opportunity. Founded in 2004, MySpace copied the basic features of Friendster, but welcomed Fakesters and allowed users to customize their pages with wallpaper and colorful layouts.

MySpace did not even seek to verify the email addresses of people who registered on the site-a standard practice on the Internet. MySpace imagined itself as an interactive replacement for MTV, a place where everyone could be a rock star.

"People kept telling us, 'You have to have a closed network,'" MySpace co-founder Tom Anderson later recalled in an interview with Fortune magazine. "'People will want to talk only to friends they already know.' We just didn't believe it. We never wanted to limit people from talking to each other."

As a result, the process of "friending" on MySpace took on a different tone than on Friendster. On Friendster, because people used their real identities, they tended to friend people they knew in real life. On MySpace, where fake identities flourished, friending did not imply that the two people knew each other.

Venture capitalist Jeremy Liew describes MySpace as a game where the winner is the one with the most friends. Like most videogames, he says, MySpace also has levels. Novices start with a rudimentary profile. Then they realize they have to take actions such as requesting friends or leaving comments on others' pages to get to the next level.

"People are competing," Mr. Liew said. "They're trying to win and doing things to try to make them win."

Rock bands, pinup girls such as Tila Tequila, and comedians such as Dane Cook all competed to gain the largest number of friends on MySpace, propelling its popularity. In 2005, News Corp. noticed the success of the fledgling Web site MySpace, and snapped it up. 

MySpace is now the most popular social network in the United States, with 70 million unique visitors in February 2009, according to comScore Media Metrix.

As MySpace has grown, so have its problems. Every day brings another story of a sexual predator, cyber-bully or others with bad intentions donning the mask of anonymity to ill-effect on MySpace. A Web site called MyCrimeSpace.com, which has no ties to MySpace, keeps a daily count of criminal activity linked to the Web site. Its tagline: "A Place for Fiends" is a play on MySpace's tagline "A Place for Friends."

In February 2006, Connecticut Attorney General Richard Blumenthal launched an investigation of MySpace. He eventually gathered a coalition of attorneys general from 50 states who demanded that MySpace adopt technology to verify the ages of MySpace members and ensure that children younger than 13 do not join the site.

Mr. Blumenthal and other lawmakers argued that verifying identities would prevent sex offenders from harassing children and bullies from picking on other children online. In essence, they wanted people to send clearer signals about themselves online.

MySpace countered the complaints about safety by adding additional privacy features for younger users. It also argued that it was not responsible for the actions of users on its site. After all, the Communications Decency Act of 1996 grants Internet providers immunity from liability for third-party content.

In February 2007, MySpace won an important court victory when a Texas court dismissed a lawsuit by the mother of a 14-year-old girl who was sexually assaulted by a 19-year-old she met on MySpace. The widely publicized lawsuit charged MySpace with negligence and fraud for failing to take reasonable safety measures to keep young children off its site. But U.S. District Court Judge Sam Sparks ruled: "If anyone had a duty to protect Julie Doe, it was her parents, not MySpace."

Anonymity also has received constitutional protection in the past. "Anonymity is a shield from the tyranny of the majority," Justice John Paul Stevens wrote for the majority in a 1995 opinion, McIntyre v. Ohio Elections Commission. But he acknowledged, "The right to remain anonymous may be abused when it shields fraudulent conduct.

But political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse."

Even so, identity verification is enjoying a renaissance on Facebook, which has returned to the closed Friendster model of requiring people to use real identities. The popularity of Facebook, which has eclipsed MySpace's audience world-wide in terms of unique monthly visitors, shows that people are willing to trade in their privacy for the privileges of joining a community based on trust.

\People often disclose their real email addresses and phone numbers on Facebook, since their profile information is automatically restricted to their approved list of friends. The advantage of this kind of network based on offline connections is that it is harder for sexual predators and others with bad intentions to penetrate.

Facebook improved on Friendster's model dramatically in November 2006, when it launched the News Feed-a feature that provided members with updates about their friends' activities on Facebook. For instance, if a Facebook member added new photos to his or her profile page, friends would be notified in a news item on their own profile pages.

This seemingly simple innovation was, in fact, technically quite difficult. It has also proven to be a powerful signaling mechanism. Facebook members use the "status update" feature to signal everything from their emotions to location.

Inevitably, in 2006, a new service started,Twitter, that distilled the status update into a standalone service. Unlike Facebook, however, Twitter has returned to the MySpace model of allowing people to assume any identity they like. Last month, Facebook had 275.6 million unique visitors world-wide, MySpace had 123.5 million, and Twitter had 9.8 million, according to comScore Media Metrix.

The problem is that all these sites, Facebook, MySpace and Twitter, constrain us to sending one "signal" to many audiences. Harvard Business School professor Mikolaj Jan Piskorski has written about the need to send different signals at different times.

That said, for job-seekers who don't want their bosses to know they are looking for work, Mr. Piskorski argued, mingling their signals with non-job seekers is effective. "By pooling themselves with actors who are using online networks to utilize their social capital better, the employed job seekers can be on the market, while claiming that they are not," he wrote.

What we need are better controls over which signals we are sending to our various online audiences. In its controversial redesign this month, Facebook has taken a step in that direction by highlighting "friend lists" that allow members to control which of their friends' updates they would like to view.

But Facebook has not taken the next step of allowing members to send different updates to different groups of friends. For example, I would like the option of sending a cheery update about the start of an out-of-town conference to colleagues, while griping to my friends about having to spend time away from my family.

Apparently, I'm not alone: Twitter says the ability to segment tweets for different audiences is its top-requested feature, but it hasn't had a chance to build it yet.

It seems MySpace was right to dream of allowing everyone the freedom to tap their inner rock star. But that now looks like a teenager's dream. As we've all grown up now, we want our multiple digital identities to more closely mirror our contradictory selves.

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Three top executives from News Corp's MySpace social network will be leaving the company to start a new business. Amit Kapur, MySpace's chief operating officer, Jim Benedetto, its vice president of technology and Steve Pearman, its senior vice president of product strategy, will stay on "for the next few weeks", according to the company.

Rupert Murdoch's 2005 purchase of MySpace for $580m looked kooky at the time. But it's been a lesson in excellent timing. Even if the social network has seen its best days, as a slew of top executive defections might suggest, it’s already paid off for News Corp.

When Murdoch bought MySpace, social networking was only beginning to gain a following. MySpace had 14m monthly users. A year later its user base had grown 400% and News Corp chief operating officer Peter Chernin called it the company's single biggest growth opportunity.

Now it brings in a whopping 126m monthly visitors. But heady growth may be a thing of the past. Rival Facebook has since surpassed MySpace, and has more impressive user demographics to boot. It now has more global visitors, with 200m monthly. While MySpace's user growth has slowed, Facebook's grew 116% last year.

The company faces a tougher grind over the next few years. It has had trouble selling its advertising inventory and missed its 2008 revenue targets. Its $900m advertising deal with Google, the source of most of those revenues, ends next year. And now some top executives, including its chief operating officer, are leaving to create their own start-up. That doesn't bode well.

Of course, had News Corp flipped MySpace two years ago when social networking was red hot, it would have been an act of pure genius. At the time, Facebook was valued at $15bn. The rival now thinks it's worth $4bn at most. MySpace's theoretical price has probably followed a similar arc. A year ago MySpace might have been worth more than $5bn, that's what Sanford Bernstein thought.

Stagnating revenue growth may mean it will never attract such a valuation again. Yet MySpace brought in $1.6bn in revenues over the past three years. More importantly, it probably made close to $200m in profits last year alone, given Murdoch's expectation for the unit to garner over 20% margins on its $900m of revenues. For the price he paid, and the cash he should be able to extract, Murdoch still looks in the money.

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Rupert Murdoch has achieved a long-held ambition. It has become plausible, even tempting to investors, for him to cede the running of News Corporation to his children. This week, it feels as though he needs his offspring more than they need him. After Peter Chernin, Mr Murdoch’s long-time number two, decided to step down, both James and Elisabeth Murdoch made clear that they have no need – or desire – to leap quickly into the breach.

James Murdoch runs News Corp’s European and Asian businesses and is chairman of British Sky Broadcasting, the UK satellite broadcasting group of which he used to be chief executive. He is his father’s most likely successor but wants to avoid the same trap as Lachlan, his older brother, who was squeezed out as Mr Chernin’s deputy in 2005.

Meanwhile, Lis Murdoch turned down a board seat at News Corp in order to keep running Shine, her independent television production company. She too was treated roughly by a former Murdoch lieutenant – Sam Chisholm, her boss when he ran BSkyB in the early 1990s. The shift in the familial balance of power, however, is more than a matter of the children having got older and gained independence and authority. It also reflects their father’s own vulnerability.

News Corp has suddenly been thrust into its most testing period since its debt crisis in the recession of 1990, which almost led to banks wresting control from the Murdoch family. This time, the balance sheet is in good order but Mr Murdoch faces a crisis of credibility.

Mr Chernin’s departure has not really altered who runs News Corp. “This company is one man’s creation and it has a very simple power structure,” says one executive. But it has crystallised the doubts in investors’ minds – is a 77-year-old who loves newspapers still the right leader for a 21st-century media group?

For now, the answer is yes. But the time is coming, sooner than Mr Murdoch is willing to acknowledge, when James Murdoch would be able to run News Corp better than his father. After insisting on his children’s right to succeed for so long, Mr Murdoch must accept it.

News Corp might be better off led by a non-Murdoch. Media groups run by low-key, dispassionate managers – Jeff Bewkes at Time Warner and Bob Iger at Walt Disney – have performed better in this downturn than those in the hands of media moguls such as Mr Murdoch and his (very) old rival, Sumner Redstone.

News Corp is worth only $15bn (€11.76bn, £10.34bn), compared with a market capitalisation of $59bn at its peak two years ago, and its shares have fallen 69 per cent in the past year. Disney’s market capitalisation is $33bn and Time Warner’s $28bn, both being less exposed to print and television advertising.

But this is moot, since the Murdoch family controls News Corp through its voting shares, having seen off a raid by John Malone. The only choice investors have is Rupert, James or a triumvirate of Murdochs.

Until now, Rupert has been the best Murdoch to have in charge. He has moulded the business over decades since he took over a small Australian newspaper group from his father in 1953. He has disrupted the media industry around the world with a string of successes, such as the creation of the Fox Network in the US and BSkyB in the UK.

Two years ago, he even looked as if he had “got” the internet better than others, having bought MySpace for $580m in 2005. It was growing rapidly but its growth has peaked, and it has been overtaken by Facebook in the US (according to some data).

His big problem is Dow Jones, the company that owns The Wall Street Journal, which he acquired for $5bn in 2007. It has since become clear that he overpaid: News Corp this month took a $3bn writedown on its newspaper unit and $5.5bn of other writedowns, mostly on its local television stations, which have lost consumer advertising.

Dow Jones has stripped off the gloss he enjoyed from MySpace and made him look like an old guy with print in his veins. Like many caricatures, this is a bit unfair, since Mr Murdoch founded the satellite television businesses that James now runs, but it has enough truth to it.

Meanwhile, News Corp has started to look uncomfortably like a legacy media company. Michael Nathanson, an analyst for Bernstein Research, describes most of its assets – papers, broadcast television, book publishing and the film studio – as “bad News” and just a few parts – its satellite and cable television operations and MySpace as “good News”.

“Even when there is economic recovery, the bad parts are not going to be growing. It is very sobering and my frustration with News Corp is that Mr Murdoch is not going to change the structure of the company because he has not changed it in decades,” says Mr Nathanson.

Mr Murdoch’s best response to this simmering discontent would be to set some timetable for when 36-year-old James, who is a chip off the old block but also a talented executive who could bring fresh perspective to News Corp, will become chief executive.

There is no sign of it. Mr Murdoch becomes uncomfortable when News Corp executives mull the possibility of him stepping down even in 15 years time, which would take him past 90. He has responded to Mr Chernin’s decision by assuming oversight of the Hollywood wing of News Corp and telling staff to expect changes.

But age affects us all, even Rupert Murdoch. He will be 80 in two years (his 78th birthday is next month) and that is a good deadline for him to give News Corp’s investors a succession plan. He should know about deadlines, for he is a newspaper man.

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