Its newspaper operations were among the hardest hit by what News Corp chairman and chief executive Rupert Murdoch termed "the continuing weakness of the global economic climate".
Overall, its newspaper division, which includes its UK newspaper assets plus titles in Australia and Wall Street Journal owner Dow Jones, pre-tax profits fell to just $7m, down from $216m in the same period a year ago. It blamed lower advertising revenue, the strengthening of the US dollar against the British pound and unspecified restructuring charges.
The decline prompted Murdoch to warn of a re-think in the newspaper model. He suggested that one of News Corp's main newspaper assets, for example The Sun or Australia's The Daily Telegraph could start charging for online access within a year or so.
"There is no doubt the traditional newspaper business model has to change, even though the present situation I think has been greatly exaggerated by the current recession," he said. "Classified revenues are undoubtedly migrating to the web, probably not to return."
However, Murdoch suggested that the worst of the global recession could be nearing an end. "It is increasingly clear that the worst is over," he said. "There are emerging signs in some of our businesses that the days of precipitous decline are done and that revenues are beginning to look healthier."
Its UK newspaper group's profit contributions declined, it said, "significantly", compared to the same period last year, due to a 21% slide in advertising revenue, as well as higher marketing and production costs. News Corp said circulation revenue increased at all four UK titles in Q1 2009 "due to cover price increases".
Earlier this week, it emerged that, for the year to 29 June 2008, News International's flagship UK quality titles, The Times and The Sunday Times, posted increased financial losses, while profits dropped at its red-top titles The Sun and News of the World.
Elsewhere within the group, News Corp revealed that its "other" segment, which houses assets such as MySpace and Fox Interactive Media (FIM), reported a pre-tax loss of $89m in Q1, an $82m decline from a year earlier.
It said the decline was due partly to lower advertising revenue at FIM - although it did not break these out - combined with increased costs associated with the MySpace Music venture. News Corp did not break out any other operating results for MySpace or FIM.
Murdoch, insisted, however, that MySpace was well positioned for growth, adding that the company will be making MySpace a much more attractive site that will be focused on ad revenue. "We’re not going for the Facebook model of getting hundreds and hundreds of millions of people who don’t bring any advertising with them at all," he said.
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