But Mr Murdoch denies he has been forced into "panic buying" internet companies because of falling ad revenues. At a conference last month, the WPP group chief executive, Sir Martin Sorrell, accused Mr Murdoch of buying web operations "willy nilly".

"There's no panic, and there was certainly no overpayment," he says. "It was a very careful strategy to go for the two biggest community sites for people under 30. If you take the number of page views in the US, we are the third biggest presence on the internet already.

"Now we're not the most profitable, or anything like it; we have a huge amount of work ahead to get that whole thing right. And we're working very hard to keep improving.

"News Corp began its $1bn new media spending spree in July when it bought myspace.com parent company Intermix.