News Corp targets radio after disappointment on TV deregulation

News Corp, the world's third-biggest media company, may look to expand into radio rather than television in Australia when ownership restrictions are abolished next year.

Chief executive John Hartigan said there were still "wonderful opportunities" in traditional media.

Although the nation's three TV networks commanded high prices, radio was "certainly something we'll look at," he said.

The company would also focus on expanding online. It planned an acquisition to bolster its jobs-search site, and may further expand its Australian-based real estate site into Europe, and develop sports sites.

News Corp publishes 70 per cent of the nation's newspapers, including the top-selling Sunday Telegraph in Sydney and national daily the Australian.

The Government is planning to abolish ownership restrictions that have prohibited Murdoch from adding television or radio to his Australian assets.

Hartigan said he was disappointed that the Government did not include plans for a fourth commercial television licence, while allowing existing networks to broadcast multiple channels.

"It just seems unfathomable that you could get more of this guff without creating some extra form of competition," he said.

Starting a new network would be cheaper than buying James Packer's Nine Network, Kerry Stokes' Seven Network or Ten Network Holdings, he said.

Seven, which has overtaken Nine as Australia's most-watched network this year, has a market value of A$2.1 billion ($2.5 billion); Ten is worth A$1.1 billion, and Nine has been valued at A$3.2 billion by analysts at ABN Amro Holding NV. Radio stations come cheaper, with Austereo Group, the nation's biggest radio network, having a market value of A$712 million.

News Corp owns 25 per cent of Foxtel Management, the nation's biggest pay TV network. Packer's Publishing & Broadcasting has 25 per cent and Telstra the rest.

Hartigan said News Corp has no plans to buy Telstra's stake to take control of Foxtel, which last month reported its first annual profit since it went to air in 1995.

News Corp and rival Fairfax are seeking new sources of growth as newspaper sales stall and advertisers migrate to the internet.

Fairfax bought auction site Trade Me, New Zealand's most visited website, in March for A$625 million, and Australian dating agency RSVP.com.au last year.

Internet advertising sales in Australia are forecast to rise 40 per cent to A$870 million this year and exceed A$1 billion in 2007, according to a PricewaterhouseCoopers report published last month. Newspaper advertising sales are forecast to increase 3.4 per cent a year until 2010.

In July, News Corp appointed BSkyB's Richard Freudenstein to run its Australian internet unit, saying his appointment was the start of a bigger expansion online.

The first push may come in the online job market, taking on Seek, the nation's biggest employment site. News Corp was looking at a "midsize acquisition" to bolster its CareerOne job site, Hartigan said. He declined to be more specific.

Australia's online employment market is dominated by Seek, Fairfax's MyCareer and News Corp's CareerOne.

News Corp's Australian internet unit, which also includes online versions of the company's newspapers and social networking site myspace, would aim to become dominant in categories such as entertainment, while sport was "a genre up for grabs", Hartigan said.

- BLOOMBERG