Media magnate, Rupert Murdoch told an earnings briefing yesterday that there were emerging signs of an end to the downslide in media advertising revenues. The News Corp chief said that it was becoming increasingly clear that the worst was over.

This upbeat assessment comes a few months following his rather pessimistic stance in recent months about the state of the media sector.

The optimistic forecast comes after News Corp-- which owns The Australian -- posted a 47-per cent drop in operating profit to $755 million for the Jan-March quarter.

A bullish performance from the group's US cable network programming division coupled with a rise in the profit from the company's 20th Century Fox film studio offset the lower ad spend in the group's free-to-air TV newspaper operations.

After accounting for one-off gains from tax benefits and the partial sale of digital technology company NDS Group, News's bottom line at $2.7 billion net quarterly profit ended flat compared with last year.

According to media analysts the result was solid and above expectations once $53 million restructuring charges were accounted for.

News shares surged to their biggest single-day rise in the year in local trade, up 9.5 per cent at $14.56 a gain of $1.27. With this rise the shares have now risen 60 per cent from their March levels of $9.05.

The global advertising market continued to remain tough with the company's Australian newspapers division recording a 42-per cent drop in operating profit.

Ad revenue fell 16 per cent, on lower display and classified advertising, particularly in the employment and real estate sectors.

However, Murdoch pointed to the gains in market-share by the Australian papers from other publishers – coupled with encouraging circulation performance that saw Australian circulation revenues in line with the March quarter last year -- as positive signs.

The story was much the same at the British newspaper operations, with gains made in the market-share by The Sun, The Times, The Sunday Times and The News of the World, Murdoch said. He added however, that The Times and The Sunday Times had been badly hit in their advertising revenues.

Overall operating profit for the newspapers and information services division was just $7 million a steep fall from $216 million for the March quarter in 2007-08.

Murdoch said classified revenues were undoubtedly migrating to the web, and would probably not return.

The filmed entertainment division also withstood the onslaught of the downturn well, posting an 8-per cent rise in operating profit for the quarter at $282 million, driven by the success of movies like Taken and Slumdog Millionaire.

Meanwhile, Murdoch's move to charge for access to online news content, in a bid to keep newspapers profitable, given the falling subscriptions and ad revenues has come in for some sharp criticism from bloggers and others who advocate free content availability.

They point out that the issue is not the financial viability of free content, it is the assumption that centralised control of information flow is somehow better that the current decentralised paradigm.