Surf's up for moguls
…and Rupe's rhapsodic

By STEVEN ZEITCHIK

Rupert Murdoch has a pretty clear idea how MySpace can bring in cash for News Corp.

But competing execs aren't so sure.

News Corp. topper told investors Tuesday that a wide range of businesses, from advertising to Internet telephony to video, are among the ways MySpace can go from a smart move on paper to a big mover on the balance sheet.

Murdoch argued at the Goldman Sachs confab at Gotham's Grand Hyatt that MySpace could be more than just a marketing platform for new Fox shows and pics.

At the same time, he expressed skepticism about selling TV on broad-based sites like Yahoo! and Google.

When asked why Fox hadn't made its shows available on those sites, he said, "I'm not sure the portal model is the wave of the future. We think people are going directly to sites," leaving the impression that MySpace and other News Corp. sites could develop into important vehicles to sell films and TV series.

Last month Fox said it would sell pics and hit shows like "24" and "Prison Break" on the site, though how much of a push the company would make compared with third-party partners had been more vague before Tuesday's comments.

Fox would get a much bigger chunk of revenue from selling off its own content via MySpace than from a partner like iTunes.

Hollywood marketing was also tabbed as a big source of coin for the site, with Murdoch saying that studio advertising is already a big cash generator at MySpace and would continue to grow. Studios that want prominent placement as a way of building up a pic's all-important "friend" count can spend as much as half a million dollars or more on a MySpace campaign.

MySpace has been on a joyride in the media and on Wall Street, earning Murdoch high marks as a visionary exec and shrewd dealmaker who snatched up a prized site for a paltry $580 million.

But other execs weren't always buying it.

In their turns on the podium, honchos offered qualified appraisals of the News Corp. unit.

"The popular thing to say is 'MySpace owns the world,' " said IAC/InterActiveCorp topper Barry Diller. "But what people do on MySpace as against what people do on Yahoo!, I'd still bet on Yahoo!"

Time Warner chief operating officer Jeff Bewkes added to the chorus of MySpace skeptics when he said he didn't want to "shower it with faint praise" but went on to do essentially that, saying that News Corp.'s ability to wring revenue from page views and users has been low compared with what other sites generate.

For his part, Murdoch said misconceptions about the site persist; for instance, the core demo is now people in their 20s and even 30s -- much higher than the earlier average of 19.

He also said he'd like to move faster to get video and other products on the site, and that slowness was the result of technical, not strategic, obstacles. "We have 300 jobs open. It's not easy to recruit software engineers at the moment," he said. "We're going as fast as we can."

Murdoch also dug a line in the sand over affiliate fees for Fox News and said he'd be willing to do battle with longtime allies over it.

News Corp.'s deals with Cox, Cablevision and other cable operators are set to expire in the next few years, and Murdoch is pushing for a quadrupling of its current rate of 25¢ per subscriber to $1.

He said the importance of the net to viewers puts him in a position where he can win a carriage war with Cablevision and other operators. "Chuck Dolan has been a friend of mine for many years, and I'd hate to have a breach over this, but if we had to, we would."

Murdoch reasoned that CNN gets 54¢ or 55¢ per sub "and we have double the audience." (Kagan Research figures show that CNN gets a fee in the mid-40¢ range.)

Murdoch is betting that if he pulled the net from systems, viewer complaints would be so loud that operators would have no choice but to make a deal. And if not, Murdoch said, his DirecTV could move in to pick up the disgruntled subs.

If News Corp. succeeded in extracting the fee of $1 per subscriber, Fox News would become the second priciest cable net for operators after ESPN.

Company also wants to expand MySpace China but has to adjust to differing expectations. "We have to see that it develops its own character and finds revenue besides advertising," he said. He said that he his wife Wendi has traveled there to help research the best way of rolling out the site.

On the studio side, Murdoch talked up upcoming DVD releases like "Ice Age: The Meltdown," X-Men: The Last Stand" and "The Devil Wears Prada," as well as unspecified theatrical releases, though he also acknowledged on box office that "it's a crapshoot."

And Murdoch didn't really elaborate on the juicy topic of a possible standoff with Liberty's John Malone -- which could resolve itself with News Corp. swapping its stake in satcaster DirecTV for Malone's 19% stake in News Corp. -- except to say that News Corp. is preparing for "one of the biggest buybacks in history, so we're saving our firepower for that."