By DAVID USBORNE
In an abrupt change of strategy, News Corp is to lay off up to half the staff at its American online division and return responsibility for the management of its Fox Television-related websites in the United States to the networks themselves.
The move could save News
Corp, headed by Rupert Murdoch, between $US50m and $US60m. However, it is a harsh blow for the online unit, News Digital Media, that was created in 1997 to oversee the expansion of the various Fox websites. About 200 jobs at its Los Angeles offices will be lost.
Meanwhile, there was further fall-out in the dot.com sector yesterday, as Mercata, an online retailer that promised lower prices through group buying, announced that it was shutting down just one day after it scrapped plans for an initial public offering.
The Washington-based company is backed by Paul Allen, co-founder of Microsoft. Mercata said it was unable to raise additional funding to stay in business, admitting that it had become "the latest casualty in market rejection of e-commerce".
Separately, it emerged that eToys, the troubled online retailer, is to lay off 700 of its 1,000 US workers after a dismal Christmas season that shattered hopes for profitability any time soon.
The ailing internet sector was further battered by reports that Liberty Surf, the French internet service provider, plans to close its activities in the UK, Spain and Sweden to cut costs as it negotiates a much-needed alliance or takeover, possibly with its Italian peer Tiscali.
At News Corp, Jon Richmond, president of News Digital Media, called the change a "consolidation that is expected to result in significant cost savings".
The three websites involved are Fox.com, Foxnews.com and Foxsports.com.
