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News Corp. Bets on Tones

September 13, 2006|From Reuters

News Corp. has agreed to buy 51% of mobile-phone ring-tone firm Jamba for about $188 million from VeriSign Inc.

News Corp., the U.S.-based media conglomerate owned by Rupert Murdoch, said Tuesday that it planned to merge the global Jamba brand and the accompanying U.S. Jamster brand with its Mobizzo unit, which sells short video clips of TV programs including "24."

"Wireless technology gives us an enormous opportunity to reach billions of mobile-phone users with our content," said Peter Chernin, president and chief operating officer of News Corp.

Internet security company VeriSign, based in Mountain View, Calif., bought Jamba in 2004 for $273 million in cash and shares.

Entertainment companies have been rapidly experimenting with different business models to sell songs and programming over mobile phones, but so far ring tones are the biggest market.

Research firm Juniper expects global ring-tone sales to be about $6.6 billion by the end of the year but sees the market shifting to complete song sales.

"The ring-tone market is still growing, but most of the growth in the mobile music market will come from full-track music, whether it's downloads or streams," Juniper research director Bruce Gibson said.

He said he believed ring tones would shrink from 80% of the mobile music market to about 50% by 2011.

News Corp. is already planning to make clips from its hit animated series "The Simpsons" available through Jamba.

The company also said it was building a link between users of its MySpace social networking site and mobile-phone customers.

Lucy Hood, president of Fox Mobile Entertainment, will become chief executive of the new joint venture, News Corp. said.

Berlin-based Jamba was founded in 2000 and vaulted to fame in 2004 when its Crazy Frog ring tone became a No. 1 single in Britain after a television marketing blitz.

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