Hey hey, My MySpace!

News Corp. says that revenue from its popular social networking site tripled in the most recent quarter; company also vows that Fox will win this year's ratings battle.

By Paul R. La Monica, CNNMoney.com editor at large

NEW YORK (CNNMoney.com) -- News Corp. president and chief operating officer Peter Chernin suggested that the company's rapidly growing online division, which includes the popular social networking unit MySpace, could beat the company's revenue targets for this fiscal year and will be profitable in 2008.

The comments came during a conference call with analysts Wednesday morning to discuss News Corp's (Charts) fiscal second-quarter results, which beat analysts' expectations.

News Corp. said revenues at social networking site MySpace tripled in its most recent quarter and the company expects the site to be extremely profitable in 2008.

Chernin said that revenues from MySpace grew 25 percent from the fiscal first quarter, which ended in September, and tripled from a year ago. He said that total sales for Fox Interactive Media, which includes MySpace, could top the company's expectations of $500 million in sales this fiscal year, which ends in June.

David DeVoe, News Corp.'s chief financial officer, added that Fox Interactive Media generated about $125 million in revenue during the quarter, up 70 percent from last year. A majority of that came from MySpace, he said, but the unit did post a slight loss.

But Chernin said that Fox Interactive Media would be profitable in 2008, driven by improvements in advertising technology. He suggested that operating profits should be in the range of 20 percent for Fox Interactive Media, a remark that prompted News Corp. chairman Rupert Murdoch to say that this estimate was "pessimistic" and that margins should be higher than 20 percent.

Murdoch added that News Corp. had no interest in spinning off Fox Interactive Media or MySpace.

MySpace has a partnership with search engine leader Google (Charts) that makes Google the exclusive provider of search results on MySpace.

According to that deal, Google will pay a minimum of $900 million over the next few years. However, a story in Wednesday's Wall Street Journal, suggested that there was a delay in getting the Google deal officially launched since MySpace was also in talks with online auction company eBay (Charts) about a partnership.

Chernin, commenting on a question about the Wall Street Journal story, said that MySpace has a binding letter of intent with Google and expects the deal to kick in later this year after more negotiations are completed.

Besides the discussion of MySpace, News Corp. executives spent much of the call discussing their broadcast television business. The Fox network got off to a sluggish start in the fall due to weak ratings for the baseball playoffs as well as a lackluster crop of new shows. But Fox has rebounded so far this year thanks to the return of hits "American Idol" and "24."

Still, the company's ballyhooed launch of MyNetworkTV, a new network that exclusively airs English language telenovelas, soap operas that run six nights a week in a serialized format, has been a big flop ratings-wise.

"The weakness in TV reflects deeper issues such as weak broadcast network ratings, although as usual the recent debut of American Idol has boosted ratings. We note MyNetwork TV, however, remains a work in progress," wrote Bear Stearns analyst Spencer Wang in a report after News Corp. released its earnings.

But Chernin was confident that the company could turn MyNetworkTV around. He noted that the network recently hired Greg Meidel, formerly an executive with CBS (Charts), as its new president.

Chernin said that within the next few months, MyNetworkTV will change its format. The network will add movies to its prime-time schedule and is also partnering with the International Fight League, a team-based martial arts league, to broadcast International Fight League events.

"Clearly, we've made mistakes but I'm confident the worst is behind us," Chernin said. "We'll have better, cheaper and more advertiser friendly programming going forward."

Chernin also predicted that Fox, thanks largely to the return of "Idol," as well as improved ratings for dramas "House" and "Prison Break" will win the ratings battle for 18-49 year-olds, the demographic most sought after by advertisers, for the third consecutive season.

Fox currently trails CBS and is in a dead heat for second place with Walt Disney's (Charts) ABC and General Electric's (Charts) NBC in the ratings race for 18-49 year-olds.

"Despite our early season weakness we are once again poised to make a close horse race for the ratings title," said Chernin.

What's more, he predicted that Fox could very well win the ratings battle in the 2007-2008 season as well since Fox will be airing the Super Bowl in 2008. CBS aired this year's Super Bowl, which was watched by more than 93 million people.

"If we're not the number one network next year, hopefully for the fourth year in a row, we'll be somewhere between angry and disappointed," Chernin said.