NewsCorp.

　　News Corp. (NASDAQ:NWS) competes with other media conglomerates like Disney (NYSE:DIS), CBS (NYSE:CBS), Time Warner (NYSE:TWX), Viacom (NYSE:VIA) and New York Times (NYSE:NYT) in the media and entertainment business. Our price estimate for News Corp’s stock stands at $23.20, which is a premium of roughly 25% to market price.

　　News Corp recently revealed its digital magazine “The Daily”, specifically designed for Apple’s (NASDAQ:AAPL) iPad. Rather than being a modification of existing magazines or newspapers, this is a completely new product optimized for tablet viewing. The company had reportedly invested about $30 million to create the product.
　　

　　The move comes as a competitive step against Time Warner, which has moved to offer subscriptions to its magazines like Sport Illustrated and People on connected devices. More specifically, Time Warner’s offerings will be available on tablets from HP and Samsung, which are direct competitors to the iPad. The media companies appear to be choosing sides in the tablet wars.

　　News Corp’s offering include two subscription plans (weekly and yearly), interactive pictures with 360 degree images, sharing of information on social networking sites and recording of audio comments. [1] It’s a unique product and shows that News Corp is looking towards the future as media shifts to digital.

　　But the company is still heavily reliant on “old media”. Below we explore how much of News Corp’s equity value is exposed to traditional print media, which could be at risk should a broader shift to digital content take hold.

　　22% of News Corp’s Value Comes from Newspapers and Magazines

　　We estimate that newspapers like Wall Street Journal, Dow Jones and NY Post together contribute about 14.2% of our $23.20 price estimate for News Corp stock. Notably, this also includes the company’s newspapers in Australia and the U.K. Although some of these also have an online presence, the prime revenue source is stil the traditional print medium.

　　Apart from this, magazines and book publishing unit Harper Collins together contribute around 7.3% to News Corp’s stock value. Given that a significant 22% of News Corp’s stock value is exposed to “old media”, it makes sense for the company to make the $30 million investment to expand its digital magazine products.

　　But does it make sense to exclusively stick to Apple? Maybe for the time being, given that Apple’s iPad remains the king of the tablet market. But as Apple’s dominance is challenged in the coming years from new products entering the market, it might make sense for News Corp to reach across party lines.

[时间：2011-03-09]