News Corp has had some trouble as of late. In fact, it took $2.8 billion in charges in its quarterly earnings report. The company described their write-downs,
The charge consisted of a write-down of $1.5 billion of goodwill and a $1.3 billion write-down of the Company's indefinite-lived intangibles, principally related to the Company's publishing businesses, most significantly the Australian operations.
The important part of this announcement is the publishing businesses. One of the most notable publishing businesses that News Corp owns is The New York Times. The NYT owns a well-known but struggling website, About.com. One way NYT and News Corp plan on helping fix their costs is to sell-off About to Answers.com, the Q&A website for $270 million. While this isn't quite $2.8 billion, it could represent a change in business model, which is something NYT needs.
The problem here is that About is incredibly inexpensive to produce content for and has a lot of traffic. It would seem that the change that needs to happen is figuring out how to monetize the site, not sell it off. This isn't the first time News Corp has failed to monetize a popular website, however. Most notably, Myspace cost News Corp millions after failing to figure out how to compete with Facebook. A turnaround plan has been in place to get About back on track, but maybe News Corp just isn't cut out for the new media world. The company said about profitability,
While About is gaining momentum in its turnaround efforts, and we expect to build on that progress in the second half of the year, we have reduced our long-term display growth and profitability assumptions for the group.
It is a little close to home for us to see About have problems. The host of The Piltch Point on F5 Live, Avram Piltch, spent time at About in his editorial past, and it is always hard to see a company you put time into in trouble. Hopefully, under Answers.com's guidance, the site can regain its former glory.