News Corp. throws Rotten Tomatoes at Flixster

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Rupert Murdoch is getting out of the produce business.

News Corp. has sold Rotten Tomatoes, the movie reviews compilation site it received as part of its acquisition of IGN Entertainment in 2005, to fast-growing user reviews site Flixster Inc., which is aiming to take on market leader IMDB (Internet Movie Data Base).

Under the terms of the all-stock deal, Murdoch’s media conglomerate will get a substantial minority equity stake in Flixster and a non-voting seat on Flixster’s board of directors.

The deal is the latest sign that News Corp. wants to unload what it views as non-essential digital assets as it attempts to re-focus and grow its two biggest online properties, IGN and MySpace. The conglomerate’s Fox Interactive Media division, which houses them both, has consistently lost money in the last year and took a $403-million impairment charge last summer.
News Corp. appears to be targeting IGN at the site’s original audience of young male video game players. Then-independent IGN bought Rotten Tomatoes in 2004 as part of a plan to expand into movie coverage. However, the movie reviews site doesn’t fit into IGN’s video game focus and News Corp. apparently concluded it didn’t want to invest resources to grow Rotten Tomatoes, which gets roughly 10 million visitors per month.

San Francisco-based Flixster, which is privately held, has more than 20 million monthly visitors and a database of more than 2.3 billion user reviews, is looking to become a major player in the online movie news and information space, which is dominated by IMDB and also includes sites such as Yahoo! Movies, AOL’s Moviefone, and Fandango.

‘Both sides wanted to build a player that can be No. 1 in the category and our feeling is that a strong independent company is the best way to do that,’ said Joe Greenstein, chief executive of Flixster.

Rotten Tomatoes’ 13 employees will move to Flixster as part of the deal and no layoffs are planned, Greenstein said.

-- Ben Fritz