News Corp is Selling MySpace for $100 Million

http://socialtimes.com/news-corp-is-selling-myspace-for-100-million_b59885

by abraham • 15 years ago

29 17 15 years ago

dotBen2• 15 years ago

News Corp is still walking away from this in the money.

Sure they bought the thing for $580m and now selling it for $100m, but they had many many good years of $750m-$1bn revenue (ok we don't know what profit looked like given Fox Interactive is a private company but I'm sure it was strong).

It also put skin in the game for News Corp that was otherwise going to miss out on an entire generation of innovation.

As someone who briefly worked for MySpace during the glory years, I'm not weeping any tears for Rupert.

jaredsohn2• 15 years ago

I had similar thoughts when it was announced three months ago that MySpace would be put up for sale, but I now think otherwise after getting a response pointing out MySpace's massive losses in recent years.

Take a look at this site: http://www.bnet.com/blog/advertising-business/news-corp-may-... It lists the (lack of) profitability of News Corp's "Other" category over the years (of which MySpace is a large part).

Here is my own research from doing Google searches of when MySpace is mentioned in News Corp conference calls for quarterly reports:

2006: http://markpincus.typepad.com/markpincus/2006/04/myspace_rev...

2007: http://www.zdnet.com/blog/btl/news-corp-myspace-on-track-to-...

2008: http://www.zdnet.com/blog/btl/fox-interactive-turns-annual-p...

2009: ???

2010Q1, 2011Q1: http://www.pcmag.com/article2/0,2817,2372103,00.asp

From these links, it seems like MySpace had total revenues of only $200 million in 2006 (not sure of the profit), netted "modest" profit in fiscal 2007 on $500 million and $10 million on $550 million revenue in fiscal 2008. Also, for at least two quarters over the past three years, MySpace has lost $100-$150 million (and likely lost similar amounts in at least some other quarters during this time).

dotBen2• 15 years ago

Based on my knowledge those numbers are off.

In terms of what we can talk about publicly, Google had a search deal with MySpace that was worth $900m over 3 years. Your quoted numbers combined over the three years the contract was in effect barely reflect that. And the Google deal was just for remnant advertising - MySpace made a solid income selling display advertising, 'take over homepages' (worth $$$), etc.

kennywinker• 15 years ago

I'll give you $100 _dollars_ for it.

obtino• 15 years ago

They overpaid by ~$240 million when they bought it and should consider themselves lucky if they get what they're asking now.

ascott• 15 years ago

For me, this further confirms the value of usability and design. Facebook did a better job, and so people used their service.

I can't help but draw a parallel with what is currently happening in the tablet market. There was a quote posted on daring fireball yesterday from Jim Dalrymple: "There is no compelling argument that anyone can give that says that comparing an operating system to a hardware device makes sense. None."

I think he's nailed it, we've entered a phase of computing where software counts for more of the value of the device or service.

angryasian• 15 years ago

I know everyone sprouts this as a big reason, but I reason network effect was the bigger reason. Facebook spread around the cooler demographic, mainly college kids, built huge momentum and just became a steam roller. I think initially design of facebook was minimal only because they didn't have a good designer and disregarding the importance of hip factor in social sites is misleading.

Quarrelsome• 15 years ago

I think people preferred the original default privacy settings of facebook too. Also i'm not sure it was necessarily a "cooler" demographic but more a younger/newer/not myspace one. We may well still see Facebook suffer a similar fate as users transition to a more "fashionable" site in the future.

vnorby• 15 years ago

The 100m figure and some of the facts in the article are simply not true or are already old news by this time. I will state as I have in the past - I'm an engineer at Myspace (correct capitalization now) but my opinions do not reflect that of my employer. I think it's public knowledge that they are in a sales process, but nobody is throwing numbers around here or company names. Mike Jones (the CEO) is doing a great job of internal transparency and it's pretty obvious that there is no set price. If it was as easy as just throwing down $100m as the top bid, somebody already would have swooped in and bought it.

fleitz• 15 years ago

Actually it would pretty much be that easy as $100mm is way more than it's worth. The reason you're reading that it's for sale is because the buyers and sellers probably havent agreed upon a price and Fox is shopping it to a bigger market in order to drive up valuations. If the buyers and sellers had agreed you'd be reading about a buyout.

A better and way more interesting question is if you had the $100mm to buy it what would you do with it? I've created an Ask HN if anyone is interested in a more thorough discussion. http://news.ycombinator.com/item?id=2495933

vipivip• 15 years ago

How much would you pay for MySpace? Some people think they are lucky to get $100 million.

cicatrix_manet• 15 years ago

"i'd buy that for a dollar!"

daimyoyo• 15 years ago

I'm glad newscorp is letting them go. MySpace isn't the kind of company that fits well with uncle Rupert's business philosophy. During his tenure as the owner of the company they've donked off tens of millions of users because he doesn't get the Internet and never will. That said, there's still tens of millions of users on the site and it can become a viable business once again. Will it ever come back to where it was before FaceBook? Probably not. But it can still be a business that generates hundreds of millions annually. Which by any metric isn't bad.

kpanghmc• 15 years ago

It seems like Google would be a potential buyer. They've made it no secret that they're interested in getting into the social network game. Purchasing MySpace would be a nice way to bootstrap their service with users.

macrael• 15 years ago

I'm not sure purchasing a dying service with a negative brand is a good way for Google to get into the game.

With Google's recent level of seriousness directed toward social, I sincerely doubt they are looking to acquire the central parts of their upcoming endeavor.

News Corp is Selling MySpace for $100 Million

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