From spring 2005 until summer 2007, News Corp. (NWS) went on a digital media acquisition binge that could only be described as dizzying:

• Intermix, parent of MySpace
• Scout Media
• IGN (how they inherited me for six months via IGN’s acquisition of AskMen)
• Photobucket
• Flektor
• Strategic Data Corp.

Then Chief Architect Ross Levinsohn resigned, signaling an end to the shopping spree. Then Heather Harde - who supported Levinsohn in the M&A capacity left, too, to join Michael Arrington at Tech Crunch.

Within weeks, CBS (CBS) picked up the baton, and it then went on an impressive shopping spree:

• Last.fm
• Wallstrip
• Spotrunner (investment)
• CNET - which we called, by the way, 8 weeks before it happened.

Yesterday News Corp. hired Erik Moreno as SVP of M&A, reporting to Mike Lang.

My take: this is Rupert Murdoch reacting to his pal Sumner Redstone’s shopping spree.

In fact, money man Jim Cramer apparently viewed CBS’ buying of CNET as a “watershed” transaction that basically signaled the acquiescence of old media. “The big networks won’t be able to maintain the cash flow to subsidize loss-making digital investments, so now they’re shelling out big bucks to get in the game.”

I could hyperlink back to a dozen stories on CBS and News Corp. where this has been building up… but I agree with Cramer on this: big media’s erosion of offline revenues is starting to accelerate and you will certainly see an uptick in acquisitions, especially in this more sane (or read: less crazy) valuation atmosphere.

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Ashkan Karbasfrooshan

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