Murdoch last week confirmed during an earnings conference call with analysts that the company wasto buy a controlling interest in a Web search engine, which he would not name, and that it had budgeted up to $2 billion for investments and strategic acquisitions.
Unidentified News Corp. sources cited by the Los Angeles Times said its negotiations with Blinkx were not as far along as Murdoch indicated.
The company this summer launched Fox Interactive Media, a new Internet division that includes all of News Corp.'s Web properties.
That division has already bought sports Web site operator Scout Media for an undisclosed fee and announced a planned $580 million acquisition of Intermix Media, operator of social networking site MySpace.com.
News Corp. also has launched a $90 million takeover bid for Australian online property-listing site RealEstate.com.au.
Company spokesman Andrew Butcher declined to comment, and a Blinkx spokeswoman was not immediately available.
Blinkx, based in San Francisco, is best known for providing searches of video files on the Web. It competes with Internet search leaders Google and Yahoo in that upstart category.
Media companies have been scooping up Internet names in a bid to profit from the online advertising boom, fueled in part by the popularity of Web search ads from Google and Yahoo.
Some newspaper operators are also seeking to boost their classified advertising businesses, which have been under pressure from Internet companies like eBay and Craigslist.org.
Media mogul Barry Diller recently bought