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News Corp. Lost $10 Million on iPad App

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It's been a rough day for News Corp.

Missing an Avatar-level blockbuster and weighed down by the MySpace albatross around its neck, the company reported a 24% decline in net income on a 6% drop in revenues for the first quarter -- reaching $8.26 billion and adjusted earnings of $0.26 per share. Those numbers fell short of analysts' estimates of $8.42 billion and $0.27 earnings per share.

Unsurprisingly, the slow death of MySpace led a loss of $165 million, which the company attributed to "lower advertising and search revenues partially offset by lower operating expenses."

But during the grim earnings call, the state of The Daily was also mentioned. And it wasn't good.

Launched in February after nearly a month of delays, News Corp's iPad-only newspaper hasn't been hitting the heights Murdoch and Co. hoped for. In fact, since its debut, The Daily has lost $10 million despite earning an estimated 800,000 downloads. However, as All Things D's Peter Kafka noted, those are downloads and not paid subscriptions, which is reportedly "in the ball park" but low nevertheless.

Adweek's Katie Feola remarked that company COO Chase Carey grew "mildly agitated" when asked the number of free trial subscriptions versus paid subscriptions, reminding listeners "We're only a month into this," and the company is "not going to build this in a fishbowl." He added, "This will be a very different business a year from now... and will continue to evolve."

A year from now? Sounds like News Corp. is at least five years behind.

If you recall, News Corp sunk $30 million by the iPad app's launch date -- which included a Super Bowl ad at an estimated cost of $2 million to $3 million -- and has cost the company roughly a half million dollars per week, according to Mashable's Lauren Indvik. And as Indvik noted in February, conceptually, The Daily was flawed from the start since "most iPad owners don't use their iPads to access breaking news, and that The Daily, in its current iteration, isn't really a newspaper; it's a magazine."

And judging from its performance in light of the countless free news outlets accessible from any device, it's also an unnecessary and superfluous app.

(See also: Is Apple Ditching the iPhone Wire for iOS Updates? and Creepiest. Android Stylus. Ever.)
POSITION:  No positions in stocks mentioned.