Monday, May 01, 2006

Fox Interactive scoops up early stage startups

From today's VentureWire alert... great source of day to day VC info....

Fox Interactive Media has acquired small Internet start-ups kSolo Inc. and Newroo Inc., proving that News Corp.'s online division is keeping close tabs on young entrepreneurs as it builds its network of Web properties.

The acquisitions, whose values weren't disclosed, are minor deals for Fox Interactive, which paid $580 million last year for Intermix Media Inc., the parent company of social networking site MySpace.com, and has made no secret of a $2 billion war chest for acquisitions. Newroo was formed in 2002 as a service for aggregating news and other Web content. The company was still developing the technology when Fox bought the company earlier this year. KSolo last summer launched its Internet karaoke service, in which people can choose from a database of thousands of songs, record performances and send their renditions to friends via "singing e-cards" and Web casts.

Neither kSolo nor Newroo have venture capital backing, but they show that News Corp. is looking for smaller, early-stage acquisitions. "A lot of companies today are building for the quick flip," said Chris Shipley, an industry analyst and organizer of the DEMO consumer technology conference. "[Fox] is making a smart play to catch some interesting media properties - before those companies have taken [venture] capital - and really betting that they are going...to help them build out their media properties."

Fox Interactive, which was formed last summer to house News Corp.'s growing stable of Internet assets, has made a handful of high-profile acquisitions in the past year, paying $650 million for online media company IGN Entertainment Inc. and $80 million for private equity-backed sports publisher Scout Media Inc. The buzz from those deals, Fox said, has prompted young entrepreneurs - like Newroo's founders - to approach Fox early-on before they raise funds from venture capital firms.

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