Friday, June 24, 2011

News Corp.'s BSkyB takeover could be just the beginning

News Corporation yesterday inched closer to UK government approval of its £7.8 billion buy of British Sky Broadcasting Group Plc. And should the deal go through, James Murdoch has hinted that it will be the first step in a larger expansion plan, MediaGuardian reported.

Regulator Ofcom yesterday submitted its recommendation on the offer, and if government approval is gained, price negotiations are expected to begin, according to Bloomberg Businessweek. Should the deal go through, News Corp. will own the remaining 60.9 percent of BSkyB that it does not already own.

Although News Corp. is viewed as one of the world's largest media conglomerate, Murdoch said the rise of technology in the digital sector means threats are coming from “much, much bigger beasts,” and competing with them will be the biggest challenge in the future. He listed Google, Apple, Deutsche Telecom, Verizon and Telefonica as examples.

News Corp.'s current 39.1 percent of BSkyB and its stake in the UK newspaper market add up to an ownership of more than 40 percent of the national media market, the Financial Times noted.

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