BigShinyThing

The California-based company owns MySpace.com, the fifth most viewed web domain in the US, as well as some 30 other websites. In its most recent quarterly results, Intermix Media reported revenues of $24.1m and a net loss of $409,000.

MySpace.com offers users chat rooms, blogs, photos, music sharing and other social networking features. This encourages the much desired ’stickiness’ (users hanging around for longer and coming back for more) that Murdoch believes can enhance his media empire. The announcement follows the creation last week of Fox Interactive Media, an internet division that will manage the group’s online sites and develop new business.

Murdoch’s move is part of what the Financial Times terms a new “rush to buy internet companies” (subscription required), driven by growth in internet advertising revenues. Online advertising is estimated to have reached nearly $10bn last year but with growth prospects of close to 30 percent this year and more than 20 percent in 2006. Traditional advertising and, in particular newspapers, are expecting low single digit ad revenue growth at best.

Unlike last time around, this is no spectre of a boom - at least that’s what everyone is hoping. According to Michael Nathanson, global media analyst at Sanford Bernstein, “The internet is not a fantasy any more. It is becoming a really important part of business.”