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Facebook and the News Corporation: "External Convergence"

Written By mista sense on Wednesday, April 23, 2008 | 1:32 PM

So Marcus Brauchli is
out as editor of The Wall Street Journal. The Cable Gamer doesn't usually venture opinions very far away from cable news, so I wouldn't be inclined to say anything about such a news item, although it is always interesting to see what happens as newspapers, TV, and the Net are all rapidly converging.

And of course, this Gamer always likes to keep up with the way stories play out, and I was especially curious as to how the Journal itself would cover the news of a top executive's departure. For what it's worth, I thought that the story--jointly written by Jessica E. Vascellaro, Merissa Marr, and Sam Schechner--was excellent. In good Journal style, it told the story, not shrinking from detail, such as Rupert Murdoch's shake 'em up speech in January to employees assembled at a Marriott Hotel across the street from WSJ HQ. And the authors also didn't shrink from pondering the larger implications, "the culture clash" that hastened Brauchli's departure, the "dramatic changes" ahead for the venerable broadsheet.

But here's what really piqued by interest: On the same web page as the Journal's Brauchli story was an ad for Facebook, the social network. (See screen grab above, and it's probably still on the WSJ site, although, of course, Net-based ads are always subject to change, faster than you can say "algorithm.") Now nothing wrong with Facebook, of course, but it is a rival to Myspace; Murdoch's News Corporation shocked the new-media world three years ago when it purchased Myspace.

One theory, I am sure, behind that purchase was that Murdoch would identify synergies between the old-media properties of NWS and this new media. Imagine, for example, being able to watch Fox TV content while surfing around on Myspace. For reasons TCG doesn't quite understand, that particular synergy never happened.

Instead, NWS teamed up with NBC to create Hulu, as a place to watch video. Hulu is an extremely cool example of what might be called "external synergy"--that is, two companies (NWS and NBC) jointly pooling some of their operation. More on that below.

Meanwhile, there's no need to worry about Myspace; it has signed a deal with three of the top four music publishers to compete with, say, iTunes.

But in the meantime, what's interesting to see--in the screen grab above--that Facebook is advertising on the WSJ site, which is, of course, owned by Murdoch's News Corporation, which also owns Myspace. In other words, Myspace's owner is also doing deals with Facebook.

The Cable Gamer doesn't know what all this means, but it is interesting to see companies wheeling and dealing like this. We think of Convergence as the aforementioned union of print, TV, and the Net, but there's another kind of convergence, too, the aforementioned "external convergence," which is the jumbling of all these different companies, and all their different functions. And so this instance, of Facebook getting together with News Corp., is a perfect example.

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