ACQUISITIONS

NEWS CORPORATION TO BUY INTERMIX

Rupert Murdoch’s News Corporation agreed to buy Intermix Media Incorporated, an operator of more than 30 marketing and entertainment Web sites, for $580 million, a week after forming a new unit to capture a share of the surge in Internet advertising.

Intermix shareholders will receive $12 a share in cash, New York-based News Corporation, the no. 4 press and broadcast company, said today in a statement. The price is 12% more than Intermix’s closing price July 15. Los Angeles-based Intermix’s sites include Flowgo.com and MySpace.com, which allows people with common interests to communicate using e-mail and chat rooms.

News Corporation is adding a company whose sales surged 49% last year and was also accused by the New York attorney general, Eliot Spitzer, of installing spyware on users’ computers. Intermix, which settled the suit last month, will dovetail into News Corp.’s new unit managing sites for its Fox division’s entertainment, news and sports TV networks, and its film studio.

“The Internet is still a small part of overall advertising, but it’s growing rapidly and it’s a sea change,” ThinkEquity Partners analyst John Tinker, who has a “buy” rating on Intermix shares and owns them personally, said in New York. “Myspace.com has become one of the biggest sites in the country out of nowhere.”

Intermix shares rose to $11.74 by $1.02 cents, or 9.5%, at 1:57 p.m. in American Stock Exchange trading. They had increased 90% this year before today. News Corporation’s Class A shares fell to $16.59 by 5 cents in New York Stock Exchange composite trading and had declined 11% this year before yesterday.

– Bloomberg News

WALL STREET

STOCKS FALL ON CITIGROUP EARNINGS

Wall Street’s rally skidded to a halt yesterday after weaker-than-expected earnings from Citigroup Incorporated raised questions about other companies’ second-quarter results.

With two weeks of earnings reports ahead, Citigroup’s profits punctured some of the optimism that lifted stocks last week. The nation’s largest financial institution said challenging market conditions, especially in its fixed-income trading, left its earnings 5 cents below Wall Street expectations.

“Citigroup got the market off to a bad start,” a portfolio manager for Independence Investment LLC in Boston, John Forelli, said. “Investors are preprogrammed for companies to beat expectations.”

The price of oil fell $1 a barrel in morning trading after OPEC lowered its 2005 global demand forecast. A barrel of light, sweet crude oil settled at $57.32, down 77 cents, on the New York Mercantile Exchange.

The Dow Jones industrial average fell 65.84, or 0.62%, to 10,574.99.

Broader stock indicators also dropped. The Standard & Poor’s 500 index fell 6.79, or 0.55%, to 1,221.13, and the Nasdaq composite index fell 11.91, or 0.6%, to 2,144.87. Some analysts believed the market was due for a pullback. “We’re seeing some normal profit taking that comes after the nice run we’ve had since May,” a senior vice president, and director of the Private Client research group at RBC Dain Rauscher, Janet Engels, said.

– Associated Press

ICAHN DROPS MYLAN LABS BID, OFFERS TO SELL SHARES

Billionaire investor Carl Icahn dropped his $5.39 billion takeover bid for Mylan Laboratories Incorporated and offered to sell his shares after American regulators opened a probe of a Mylan pain patch that was linked to 120 deaths.

“It would be difficult to win a proxy fight with the stock trading at the current levels,” Mr. Icahn’s High River Limited Partnership said yesterday in a faxed statement. “As previously stated, Mr. Icahn did not wish to be a passive investor in this company.” Mr. Icahn will make a profit of at least 14% on his 26.3 million shares, reported in a November 1 filing. He may gain $62.7 million under Mylan’s share repurchase program, based on the company’s statement yesterday it would probably buy 24.7 million at $19.50 each. In addition, Mr. Icahn would have collected $1.6 million in dividends paid July 15 after Mylan doubled the quarterly rate and $1.6 million for the two previous quarters.

Mylan shares had their biggest decline in 11 months today on evidence that Mr. Icahn tendered his stock in the $1 billion buyback offer that expired at midnight July 15. The shares fell as much as 5.4% after the company said yesterday an unidentified stockholder tendered 26.3 million shares, matching the amount Mr. Icahn reported owning.

– Bloomberg News

TECHNOLOGY

COMPANIES, STATE INVEST $600 MILLION IN SEMICONDUCTOR PROJECT

Four of the world’s largest computer-chip makers and New York State will spend $600 million over the next five years on a research, education, and economic development project focused on creating the next generation of computer microchips while limiting costs.

The project, to be officially launched today, will get $200 million in funding and equipment from Armonk-based IBM Corporation, Sunnyvale, Calif.-based Advanced Micro Devices Incorporated, Infineon Technologies AG of Germany and Boise, Idaho-based Micron Technology Incorporated. The state is contributing $180 million. More than $200 million is coming from numerous companies that provide the materials and equipment used to make semiconductors.

Analysts say such collaboration is needed in the industry with research and development costs skyrocketing in recent years because of advancements in the speed and intricacy of semiconductors.

“Chip companies have continued to make things smaller and faster and it gets increasingly more difficult to do this,” an industry analyst with the Gartner market research firm, Bob Johnson, said. “They have recognized they need to pool R&D money to forward basic research.” The work will take place at the College of Nanoscale Science and Engineering at the University at Albany. Organizers expect more than 500 researchers, engineers and other workers to eventually be involved in different aspects of the project, dubbed INVENT.

– Associated Press