Rupert Murdoch yesterday made a $580 million (€481 million) cash purchase of Intermix Media. It is the first significant internet acquisition since Mr Murdoch made the sector a top priority for his News Corp media group earlier this year.

Intermix Media, which is based in California, owns the MySpace.com portal, the fifth most viewed web domain in the US, as well as about 30 other websites.

In its most recent quarterly results in June, Intermix Media reported revenues of $24.1 million and a net loss of $409,000.

Mr Murdoch, chairman and chief executive of News Corp, has had his eye on MySpace.com for some time, due to its recent strong growth. However, discussions with the owners of Intermix Media only started last week.

MySpace.com users tend to spend a lot of time on the site, which offers chat rooms, blogs, photos, music sharing and other "social networking" features. Mr Murdoch believes that this "stickiness" will extend to his Fox news, sports and entertainment offerings available online, allowing the combined group to attract a larger share of the internet advertising market.

The announcement follows the creation last week of Fox Interactive Media, an internet division that will manage the group's online sites and develop new businesses. Fox Interactive will be led by Ross Levensohn, previously in charge of Fox Sports' interactive media businesses.

"News Corp is beginning to stake out its territory online, an area where it has been arguably lagging its peers, and we expect further deals to build out its internet presence," according to Douglas Mitchelson, analyst at Deutsche Bank.

News Corp said it would pay $12 a share for Intermix.

Intermix Media shares, which a year ago were at just over $2, rose a further 9.4 per cent yesterday to $11.73. - (Financial Times Service)