Fox unit to miss revenue target

News Corp.’s Fox Interactive Media said it would fall short of Chairman Rupert Murdoch’s target for revenue of $1 billion this fiscal year and announced a reorganization of the unit designed to drive growth.

“It wasn’t one smoking gun. It was a series of things that were a little late to come to market,” said Michael Barrett, who will step down as chief revenue officer at Fox Interactive after a two-month transition period.

Fox Interactive, the unit that runs the MySpace social-networking website, said it would create a division for advertising by combining its ad technology operations with the sales department. Murdoch said in August that he would be surprised if the unit’s revenue for the year ending June 30 “did not exceed a billion dollars with margins well above 20%.”

Sales will probably miss by about $100 million, the Wall Street Journal reported, citing an unidentified person familiar with the matter. Spokeswoman Ann Burkart declined to confirm the figure, saying Fox Interactive anticipates it will be close to its projection.

Adam Bain, formerly an executive for technology and production, will run the new Audience Network group. The division will sell ads for Fox Interactive websites such as MySpace and RottenTomatoes, as well as partner sites.

News Corp. Class A shares fell 39 cents to $19.24.

“The potential revenue disappointment raises questions about the growth prospects for FIM and the company’s ability to monetize social networking traffic,” Michael Nathanson, an analyst at Sanford C. Bernstein & Co., said in a research note.