News Corp. Looking To Sell MySpace 146
rudy_wayne writes "News Corp. is reportedly trying to sell MySpace for $100 million, a fraction of the $580 million it originally paid for the social network in 2005. Parties interested in acquiring MySpace include private equity firm THL Partners, Redscout Ventures and Criterion Capital, owner of social network Bebo (the company AOL bought for $850 million and then sold for $10 million). Chinese Internet holding company Tencent is also reportedly interested, and so is MySpace co-founder Chris De Wolfe. What's not yet clear is what any of these companies plan to do with MySpace if a sale goes through."
This follows news of massive layoffs and a rapidly shrinking userbase in recent months.
There is opportunity here (Score:5, Interesting)
Seriously - a company could make a ton here.
$100m for the "MySpace" name is what this amounts to. Take it, shut it down for a month, and relaunch the service completely re-invented. Take from Facebook what works (clean, simple, consistent layout; an accessible auth system; cater to businesses), and loudly fix some of its shortcomings (Insane privacy issues; constantly changing API and business pages; vendor lock-in). I think it would be an enormous hit.
Hell - simply allowing users to stick with old versions of the service for a year after new changes launch would garner a lot of attention. How many silly "Bring back the old Facebook!!!" groups exist?
Re:Shoveling dirt (Score:4, Interesting)
Facebook has been adopted by the audience that is slow to adopt and slow to move away as well, which is older people.
Myspace was never generally being used by people over 30 or so (maybe even 25), and it wasn't used to connect with family or long-lost friends. It was being used the way Twitter is used today.
Facebook created a niche and I think will occupy it for the foreseeable future. Myspace's niche was gobbled up 75% by Twitter, 25% by facebook.
Re:Overvalued ... (Score:4, Interesting)
MySpace WAS valued at $580 million.
It's not that the original value was incorrect. It's that MySpace LOST value over time. I can buy a $1500 computer today, and in 6 months it will be worth $1000, and in another 6 months it will be worth $700. That doesn't mean the original price I paid was incorrect. It just means that computers lose value quickly.
Likewise, websites can gain value very quickly, and lose value very quickly. They are high-risk. It could have very well been that MySpace evolved into what Facebook is today, and valued in the billions. In which case, NewsCorp would have been praised for their smart move at buying it at $580 million.
Purchase Value vs.Sale Value Does't Equal Profits (Score:2, Interesting)
People see the initial price tag, and then the garage sale sticker five years later, and presume that the deal was a waste.
That's like buying a new car, selling a used car and then claiming the whole venture was worthless.
The ultimate value of MySpace to News Corp. while it was in their possession, is really only known to News Corp.
Remember: this is a company bent on manipulating social order, augmenting the outcome of elections, provoking and supporting wars in which (and I'm lowballing here) tens of thousands die. I bet owning MySpace allowed them to be privy to data that was either otherwise impossible to obtain, or would have demanded hideous expenses in consulting fees.
Just because it appears as a cost center on paper does not mean it was a bad decision.