Is Murdoch's new Net strategy the way forward?

This week Rupert Murdoch's News Corporation agreed to pay $580m for Intermix Media, a Los Angeles-based company offering online services ranging from video downloads to classified listings.

Mr. Murdoch declared that newspaper Internet websites were 'bland' and that newspapers needed to do more to address the loss of circulation to younger electronic readers, and people who no longer bothered to buy a newspaper. He even went so far as to admit having been mistaken in giving up on the Internet in the early 2000s.

Arguably the world's biggest publisher today, Mr. Murdoch has also recognized what the media agencies are saying, and what clients are telling the agencies, namely that there is a definite shift away from reading newspapers to the Net as a source of news.

This is not so surprising. The Net is quicker at publishing the news. It costs practically nothing. It is easy to access at your desk or home. You can access it from multiple devices, including mobile phones.

Now it may be true that the younger generation is more Net savvy. Thus newspapers are keeping their older customers and losing the high spending youngsters. Mr. Murdoch did not takeover the world by ignoring market dynamics.

What is happening in California - the land where so many world shattering changes have originated - is also happening in the Gulf of Arabia, admittedly in a more modest way.

Internet penetration is rising sharply in the GCC, particularly in the UAE, Bahrain and Kuwait, though it remains low in Saudi Arabia, Qatar and Oman, albeit with enormous room for growth. In the UAE probably 50% of consumers have regular access to the Internet, and an increasing number use it as their primary source of news.

This is one reason for the phenomenal growth in reader numbers at AME Info, the leading business website which has just become the first to receive an ABC Electronic audit from London. Media consumption habits are changing.

You have to wonder how far this will go. In the 1940s families huddled around the radio in the USA, but then TV came along and radio was largely forgotten until its recent revival. Will it be the same for the newspapers, swept aside by a superior news medium with instant publishing of news a day before the papers?

Certainly as Mr. Murdoch concedes the newspapers will have to be more creative in their response than heretofore. And there has to be a question about the wisdom of the launching more newspapers in Dubai this autumn when the media itself is less and less important.

The audit figures for the Gulf, and more and more are coming in, show that print media is just not pulling in the readers. Not everyone is going online instead but a very large audience is altering its media habits.