A website development company is facing the axe after an Australian newspaper reported the company was making $2.5 million a month from advertising.
News.ca reported last month that the company had paid a total of $1.3 million to news websites in the past year, including $1 million to News.net.au.
In a statement, News.co.nz said it had “no knowledge” of the company’s advertising revenue.
But a spokeswoman for the company said the company “had no knowledge of any company receiving any funding for their website development”.
“We do not have any data on the exact revenue stream that these websites have been receiving from advertising or revenue sharing agreements, and the only information that we can provide is that the news websites we are advertising have been able to retain the revenue that they have been earning through advertising,” the spokeswoman said.
She said the news website’s advertising revenues were “exclusively for the benefit of the news publishers themselves”.
She said it was not unusual for news websites to make a small amount of money from advertising revenue, but it was rare for a company to make more than $2 million a year.
News Corp has denied any wrongdoing.
In April, the company announced it was ending its advertising revenue sharing program, saying it had to make room for more content.
“In order to be sustainable, we need to build more and more content,” CEO Rupert Murdoch said.
“And our news websites need to continue to be profitable to support the ongoing growth of the business.”
News Corp also said it would increase its advertising income sharing, with the company also promising to increase its funding of news websites by 25 per cent.
It said it expected to have more news websites operational by the end of this year.
“The fact that this is happening is very concerning,” news website developer and journalist Ben Anderson said.
News of the advertising revenue loss prompted News Corp to issue a statement on the website development business, saying: “We are extremely disappointed with this report, and we are working closely with News.org.au to resolve this as soon as possible.”
A spokeswoman for News Corp said the website company had “zero knowledge” that its advertising was being used for its own advertising revenue while News.
Net.au said it believed the “news” sites it was advertising were “paying for the content and the ads”.
“Our websites have had no impact on the advertising revenues from those news websites,” she said.
Ms Anderson said he was “furious” and wanted to see News Corp explain the “shocking” amount of advertising revenue it was losing.
He said he believed News Corp had “bought a billion dollars worth of advertising”.
“The way they are paying for that is just insane,” he said.