Chairman Rupert Murdoch's Address to the 2007 Annual News Corp. Stockholders Meeting

October 19, 2007- Chairman K. Rupert Murdoch:

I’m pleased to report that once again News Corporation achieved double digit earnings growth companywide, and in nearly every segment. This was our fourth consecutive year of record results: operating income was up 15 percent to $4.45 billion on revenues of $28.7 billion, which represents a 13 percent increase. Income from continuing operations grew by 22 percent to $3.4 billion, and earnings per share from continuing operations increased 24 percent to $1.08.

This performance was unmatched over the same period by any of our competitors. And while we remain constant in our pursuit of new growth opportunities, it makes sense to pause this morning and reflect upon the success of this past year, as well as our outlook for the coming months.

I want to thank you, our stockholders, for the confidence and trust you have placed in News Corporation. It is gratifying to me that so many stockholders continue to rate our Company’s prospects so highly.

Our proven track record speaks for itself: revenues have grown an average of 14 percent a year over the past five years and operating income is up 14 percent a year on average over the past four years. The stock market has taken notice: since January 1st, we have outperformed all other media stocks, and indeed over the past five years have seen our stock grow faster than both the general market and our peers. And it is with some pride that I tell you that last week our market value exceeded all of our traditional peers for the first time ever. We have a long way to go, but we’re starting to be rewarded for our efforts to transform ourselves into a company for the digital age.

It is fitting that so many stockholders from around the globe are joining us today by live webcast, as the strategies we put in place several years ago are now bearing fruit. We are only at the beginning of two of the most profound social and economic trends of our age: globalization and digitization… trends that News Corporation is uniquely poised to grasp and employ to our advantage.

Fox Interactive Media's Internet portfolio now reaches more than 160 million people globally. MySpace, our most popular site, turned profitable for the first time last year and now ranks first in the U.S. in total page views and is among the top five sites worldwide in unique visitors. We’ve improved the site’s infrastructure, broadened its offerings with the acquisition of Photobucket, and purchased Strategic Data Corp. to better enable us to monetize its enormous traffic.

While other competitors have entered the arena, none of our peers compare in terms of sheer numbers of users or, more importantly for stockholders, revenues. We should see the benefits of these improvements dramatically increasing overall Internet revenue to around $1 billion in the coming year.

Satellite remained our Company’s fastest growing segment, with SKY Italia achieving significant operating profit growth. SKY Italia is now a major growth driver for our Company. It’s easy to forget that only three years ago it lost $267 million. In fiscal 2007, SKY Italia made almost that much in profit and is on track for continued strong growth. Our part-owned BSkyB is the number one direct broadcast satellite television group in Europe, and used many new encryption technologies developed by our subsidiary, NDS.

And record results in our Cable segment were led by strong growth at all of our major channels, including both the FOX News Channel and FX. We’ve invested around $900 million in the FOX News Channel since its launch. Within the next few years, I expect the Channel to earn at least that amount annually – and its value to exceed $10 billion.

The U.S. cable channels are just part of a web of successful channels we have around the world. The Fox International Channels – a business that didn’t exist only a few years ago -- grew its profits about 80 percent last year as it expanded to a larger global audience. Overall – including our operations at STAR and SKY Italia and elsewhere overseas, we now operate 270 channels, broadcasting in 31 languages, in more than 75 countries. And many of these channels are only beginning to show their potential. We have high hopes for all our channels in the coming years.

Earlier this week, we launched the FOX Business Network. FBN has already signed deals with three of the nation’s largest cable operators, reaching more than 30 million subscribers on Day One – the largest launch of any cable channel in history. Make no mistake: FBN faces many challenges, against an entrenched competitor with a 17-year head start. I view FBN’s growth in terms of years, not months, and I am confident that our new approach to business news will be successful as we again offer viewers more choice in their media consumption.

With results across all segments strong, it would be easy to overlook some of the strategic moves we made this year to better position News Corporation for the future.

Last year, we amicably reached an agreement with Liberty Media that, when completed, will result in the largest-ever single buyback of News Corporation shares. This transaction will be earnings-per-share accretive and we will realize a tax free gain of $4 billion on our DIRECTV investment. I believe it’s one of the smartest moves we’ve made in a long time.

And in July, we agreed to acquire Dow Jones & Company. This strategic acquisition includes not only The Wall Street Journal, the world’s pre-eminent business newspaper, but other prestigious brands and a range of content that will provide us with remarkable reach and flexibility in the growing business news sector. There is a real hunger… not just in the United States, but across the globe…for financial news

With the huge worldwide expansion and globalization of business, we are set to become the premier provider of the accurate, credible financial information they demand. The opportunities are immense, and senior management has formulated a long-term plan to integrate the unique properties of Dow Jones within our complementary assets and overall corporate and digital strategy.

Even with this acquisition, our financial structure and balance sheet continue to be very strong. In fact, our financial good health earned us another credit rating upgrade earlier this month.

We’ve assembled, and continue to nurture, what I consider the most impressive lineup of businesses and talent in the industry.

From filmed entertainment to television to our world-famous print businesses to our rapidly growing new digital properties, today’s News Corporation employees embody the innovative spirit upon which this Company was founded more than 50 years ago.

Of course, we don’t simply measure our success in terms of stockholder return; we recognize that we have great responsibilities to the communities we serve. In May, we announced a Global Energy Initiative across all of our businesses that will make our Company carbon neutral by 2010.

We want to inform and engage our audiences on the issue of climate change and transform the way News Corporation uses energy. By reducing energy use throughout the Company, we will ultimately spend less and make a contribution to help protect the environment. And I’ve called on every one of my colleagues to help in this transformation.

The intelligence and imagination of our people, coupled with a bold culture that I believe stands out among major media companies, are also transforming News Corporation into an Internet powerhouse with the same determination – but with far greater speed and urgency - that transformed a newspaper business into a television and film giant.

We are leading the media industry in making this transformation, but we operate in an intensely competitive, global and constantly changing landscape. And being a leader invites multiple challengers.

We will do as we’ve always done: constantly change and reinvent ourselves, seizing opportunities. That’s what we did in fiscal 2007, what we’re doing today and what we will continue to do, with ever-increasing energy and speed, in the years ahead.

I thank you, our stockholders, for your support and encouragement in the past year. With your continuing support, I can assure that I, and all of my colleagues, will continue to work hard to navigate our ever-changing world with the same spirit of creativity and integrity that has always driven us.

Source: News Corporation

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