Rupert Murdoch's News Corporation has made a bid to buy push technology pioneer PointCast. The bid on which News Corp has declined to comment has been outlined by the Wall Street Journal (WSJ) and the Los Angeles Times.
Insiders told the WSJ that News Corp had offered between $350 million and $450 million for the company, which currently claims to broadcast news and information to one million desktops, mainly in the US.
Analysts said the deal may not be acceptable to some of PointCast's partners such as Time Warner, which has channels for CNN and Pathfinder; Dow Jones, which offers the Wall Street Journal; and Knight Ridder, provider of the San Jose Mercury News.
PointCast may also be holding back in the hope of a higher valuation as a result of its intended Initial Public Offering (IPO). Others suggest PointCast may be tempted to sell at a time when some Internet stocks are being downgraded by Wall Street. If the deal goes ahead, News Corp will gain a much needed distribution medium for its growing range of online services.
The news comes one week after News Corp subsidiary News International, which owns The Times, The Sunday Times, The Sun and The News of the World newspapers, announced a new online service provider called LineOne in partnership with BT.
LineOne is targeted against AOL, CompuServe and MSN in that it offers family content as well as access to the Internet. Priced at #14.95 a month, it aims to attract 4,000 subscribers a week, which it estimates to be one third of all new UK consumer connections. "This is a British service with the very best of British content," said News International Managing Director Douglas Flynn. "We may have arrived later than the US-based services, but we're now offering a more attractive package." News Corp's previous foray into online services was its 1993 acquisition of Delphi Internet, then a competitor to AOL, which it has now abandoned. It brokered a deal with MCI in 1995 to deliver a range of Internet services, but that too fizzled out when MCI backed MSN in 1996.
Despite one analyst valuing PointCast at $750, critics remain unconvinced that there is a real demand for "pushed" news and suggest that it could be undermined by free push technology from Microsoft later this year.
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Comcast's £29.7bn winning bid more than twice the £13.7bn Rupert Murdoch valued Sky at just eight years ago