Murdoch reveals delay in switch to paid-for content

LONDON - News Corporation chairman Rupert Murdoch has said the planned paywall for its newspaper websites would be delayed, as the company reported a $109m fall in operating profits for the first quarter of the year.

Murdoch, in a conference call last night, said that the company was "working very hard" to get the paywall system in place but couldn't promise that the self-imposed deadline of June 2010 would be met. He did not explain the reason for the delays.

News Corp has said it is working on a separate website to house content from the Sunday Times, and it is thought that this could be used to trial the paid-for system. News International has been working on it since the summer, recruiting designers and journalists for the project. The Sunday Times content is currently part of the site.

In the same call, News Corp said that lower than expected traffic at MySpace was putting in jeopardy a $900m deal with Google.

That deal, signed in 2006, gave Google exclusive rights to put search advertising on MySpace and should essentially have paid for MySpace, for which News Corp paid $580m.

It was based on a guaranteed level of traffic, however, and MySpace has not delivered enough visitors. News Corp could end up losing $100m on the deal.

At News Corp's global newspapers and information services division, operating income slumped by $109m to $25m, with the company blaming lower advertising revenues. UK newspapers, which also include The Sun and the News of the World, saw a drop in operating income after ad revenues fell by 15%.

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