Posted by: cgratton | July 9, 2009

Are You Sure You Don’t Want to Sleep on It, Mr. Murdoch?

Murdoch with his wife Wendi arriving at the conference on July 8

Murdoch with his wife Wendi arriving at the conference on July 8

At Allen & Co’s Sun Valley, Idaho media and technology conference yesterday, media grandfather and News Corp. CEO Rupert Murdoch confirmed to Reuters that he was not interested in buying Twitter, the wildly popular microblogging site that has had the web world (and the world in general) in a tizzy for months.  When asked if he would sell his now almost laughably uncool social networking site, MySpace, Murdoch bluntly replied “Hell no.”

Murdoch, and others at the conference, pointed to the fact that although Twitter is ballooning internationally at an unbelievable rate, there is no sustainable source of profit, which makes it “a tough investment to justify.”

At this year’s 27th-annual Sun Valley, a conference where (among other things) media bigwigs come to discuss, and later bid for, the latest “it” thing to update their conglomerate repertoire, Twitter was obviously the biggest buzzword.

I expected it to be a fight ’till death amongst these media moguls to own it—all of them coming out of the main conference room with ruffled comb-overs, crooked glasses and ripped suit jackets. But in a bizarre and surprising twist, most have said they are pessimistic about the future of Twitter—they don’t see how it can generate enough revenue to survive.

As reported in the Wall Street Journal, IAC Chairman Barry Diller and Liberty Media’s Chairman John Malone gloomily said that an advertising model won’t work on Twitter and subscriptions are probably the only answer—that “Sooner or later people will be paying for these services,” Malone said.

So it seems that Twitter is bringing up all the insecurities about their own companies’ futures. As Ken Auletta, the New Yorker writer who moderated the panel inside the closed conference told the WSJ, “No one had any answers” about how they can make money on the Internet.  So they obviously haven’t come up with the secret formula yet, and the hazy digital future compounded with the economy breathing down their backs is enough to make them shy away from something as promising (yet financially tenable) as Twitter.

With all the mistakes the media has made over the years not jumping on technological innovation RIGHT AWAY, and in the midst of newspaper after newspaper shutting down their printing presses after generations of storytelling, wouldn’t these men and women possibly rethink their automatic rejection of something that’s being hailed as a revolutionary information-sharing tool with no end in sight?

It seems rather short-sided, Mr. Murdoch, to throw away any discussion on acquiring Twitter when your MySpace is spiriling down the toilet both financially and in popularity.  Also, Google or Facebook didn’t have money-making business models at their start either, but hey, they turned out OK.  Just don’t be upset when everyone says “I told you so.”

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