

News Corp is Selling MySpace for $100 Million - abraham
http://socialtimes.com/news-corp-is-selling-myspace-for-100-million_b59885

======
dotBen
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.

~~~
jaredsohn
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-...](http://www.bnet.com/blog/advertising-business/news-corp-may-
never-profit-from-myspace/5493) 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...](http://markpincus.typepad.com/markpincus/2006/04/myspace_revenue.html)

2007: [http://www.zdnet.com/blog/btl/news-corp-myspace-on-track-
to-...](http://www.zdnet.com/blog/btl/news-corp-myspace-on-track-to-top-
annual-sales-of-500-million-post-modest-profit/4449?tag=rbxccnbzd1)

2008: [http://www.zdnet.com/blog/btl/fox-interactive-turns-
annual-p...](http://www.zdnet.com/blog/btl/fox-interactive-turns-annual-
profit-myspace-revenue-to-top-800-million-in-fiscal-2008/5899)

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).

~~~
dotBen
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.

~~~
jaredsohn
>Your quoted numbers combined over the three years the contract was in effect
barely reflect that.

I don't know anything beyond the sources I listed in this post and have no
idea if the quoted information is correct or not. (I could perhaps try to find
transcriptions from the actual calls, but I'm not going to do that.)

But just so we're on the page (you said the numbers barely reflect the $900
million), the revenue numbers I listed were for fiscal 2006-2008 while the
contract was for fiscal 2007-2009 so looking at fiscal 2008 and 2009, this
data suggests that Google provided only around 60% of their revenue during
this time. I wouldn't call that 'barely', although it still might not properly
reflect their revenue from other sources.

------
vnorby
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
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>

------
ascott
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
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
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.

~~~
harshpotatoes
Did they have default 'privacy' settings? I just remember being able to view
the profile of anybody who went to my university. I think the only reason I
found it useful then was because I actually used it to meet new people in my
dorm. Myspace at the time couldn't be used to find such specific people.

"You live on the 7th floor of Terry and like foo video games, I live on the
9th!"

Its usefulness declined after that first year.

------
daimyoyo
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.

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

------
kpanghmc
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
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.

------
cicatrix_manet
"i'd buy that for a dollar!"

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

------
kennywinker
I'll give you $100 _dollars_ for it.

