Monday, June 14, 2010

Hearst unloads Skiff platform to News Corp.

News Corp. announced today that it has acquired Skiff, LLC, the e-reader company that had been promoted by the Hearst Corporation -- that is, promoted by Hearst prior to the launch of Apple's iPad.

News Corp. issued a press release that announced its Skiff acquisition, as well as its investment in Steven Brill's Journalism Online.
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“Today’s developments underscore News Corporation’s ongoing commitment to create strong business models that support journalism at a time of great change in our industry,” said Jon Miller, Chief Digital Officer, News Corporation in its press release. “Both Skiff and Journalism Online serve as key building blocks in our strategy to transform the publishing industry and ensure consumers will have continued access to the highest quality journalism.”

Back in early January, Skiff LLC made a splash by unveiling its e-ink ed-reader at the Consumer Electronics Show in Las Vegas. The reader promised portability, an app store, and a flexible display. Now, six months later, not much has come of Skiff.

The acquisition of Skiff apparently will not include the device itself, which will presumably fade into memory. Black & White e-ink readers have become a dime-a-dozen, with the Kindle, Sony Reader and others in the space, while Apple continues to have the only color tablet reader in the market (yes, there are other tablets, but the others are really keyboard-less laptops).

News Corp., therefore, is getting the platform in the deal, another move towards pushing its paid content philosophy. The investment in Journalism Online is consistent with the company's efforts to get paid for content, whether in print, online or on tablets.

The company also named Jon Housman to the newly created post of president of digital journalism initiatives. Housman had previously served as strategic counsel to the company's Digital Media Group.

So who gets the better deal here? Is Hearst now free from the burden of supporting a platform that will be competing with Apple and possibly Google, and so free to strike the kinds of deals necessary in such an environment? Or is Mr. Murdoch about to enter the media distribution business himself, promoting a paid model, more friendly to media corporations than tech companies?

Update: I see that on the news wires this is the number one media story. Is that the result of a slow Monday, or will this really be significant? I would vote for door number one, but I'm open to the second choice.