Is News Corp. Looking To Sell MySpace?

from the buy-low-sell-high dept

Tue, Nov 14th 2006 11:45am — Carlo Longino

News Corp. boss Rupert Murdoch told investors in Australia yesterday that the company could sell MySpace for $6 billion now, a more than tenfold premium over the $580 million it paid for the social-networking site last July. A Wall Street analyst said a couple of months back that the site was worth $10 billion to $20 billion, though many people struggled to see the justification for such a high figure. But there's a bigger question: why does it sound like Rupert's using the Skype billion-dollar buyout plan of tossing out ridiculous valuations and asking prices for your company -- you know, the one that worked so well recently for YouTube. Could News Corp. be thinking of unloading MySpace, and Murdoch is trying to drive up the price? While such a scenario seems unlikely, it is an interesting possibility. Despite MySpace's place at the top of the social-networking space, its ownership by News Corp. has been characterized by missteps, misunderstandings, talk of inflated traffic numbers, and a strategy to make new media more like old media. While Murdoch may not understand the internet, he's proven himself to be a very shrewd businessman -- and engineering a $5.4 billion profit on MySpace in just over a year could be a pretty smart way to play the social-networking space, given the here-today-gone-tomorrow nature of many of its sites.

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15 Comments

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Anonymous Coward, 14 Nov 2006 @ 11:52am

theres no way to monetize the traffic!!!! and, these type of sites come and go, i bet within the next year MySpace loses all of its appeal. I hope no one offers more then $200,000.
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Anonymous Coward, 14 Nov 2006 @ 12:06pm

Re:
They have well over 200,000$ just in hardware.
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Anonymous Coward, 14 Nov 2006 @ 12:42pm

Perhaps worth $1.5-2 Billions
Given that Google paid $900 million to deliver ads on MySpace, it might be worth paying $1.5-2 Billion. At that price, Microsoft might find MySpace attractive, if they can get out of the Google ad contract as new owners. Alternatively, Google could buy MySpace for $1.5-2 Billion, considering they would be paying themselves $900 million for the ads they serve.

Yahoo might consider buying MySpace, but knowing them, they are sure to pass this one up too. So, let us not consider them.
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Anon, 14 Nov 2006 @ 12:48pm

Re: Re:
Are you sure? Maybe they leased it all. I would do that to before I can see any Ad dollars. YouTube was hosted on hardware from Rackspace.

I wonder what their monthly Ad revenue rate is like?
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bassboat, 14 Nov 2006 @ 12:53pm

myspace
the company will never see a profit if it pays RM $6 billion. The model just isn't there. the newcomer is eobox.com whose plan makes sense.
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Bob, 14 Nov 2006 @ 1:00pm

What a joke
If Myspace is so valuable, why is it littered with borderline porn rather than mainstream advertising? All it is is another one-pager free homepage site. It amazes me that corporations can justify big bucks for any of these type of site. Google buying Utube - big mistake. Remember @Home buying excite and Blue Mountain ecards? Where are they now?
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sean, 14 Nov 2006 @ 1:12pm

@Home buying excite when they went under they became Insightbb selling out at a loss 3 months later they updraged there services in my area.

If google purchases it they hopefully will make it a bit more frendly to report fake/porn profiles and remove them opening up more space and actually making it easier to find what you want
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Anonymous Coward, 14 Nov 2006 @ 1:17pm

Re: What a joke
except that myspace has a population of about a few million teenagers and some people in their 20s and 30s. not to mention that merchandise such as bumper stickers, t-shirts, etc are probably a large sum of revenue...
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Mike, 14 Nov 2006 @ 1:18pm

With all the child internet sexual predator incidents that occur linked to a myspace site, it would be a risky gamble for th site in the future, as I'm sure there will be legislation sooner or later to regulate protection, which in turn will hurt the sites ability to operate freely as it does now.
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Steve E, 14 Nov 2006 @ 1:24pm

Can't see them selling it yet personally (probably be proved wrong though), surely NewsCorp need to keep a foot in the social network space for their own good. A better idea would be for them to work out how to use it to their advantage and, as someone said above, monetize...
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Anonymous, 14 Nov 2006 @ 2:12pm

You can make $2.85 million dollars annually on MySpace just by bulletin posting correctly.

Why wouldn't MySpace themselves not be able to make much more than that?
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ashkan karbasfrooshan, 14 Nov 2006 @ 3:42pm

FIM worth more separate than combined?
It's not a crazy idea: FIM is worth more separately than combined. Though I don't think he wants to sell it, he's just justifying the acquisition...

Anyway, for a FIM is worth more separate than combined, check this out:

http://www.watchmojo.com/web/blog/?p=805
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xtreme, 14 Nov 2006 @ 8:13pm

Rupert Murdoch is a smart guy
He is smart guy because he wants to get rid of Myspace before the value go under $200 G.
I've always thought Myspace.com is one of the worst website and it seems that i may actually be right.
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Josh Chandler, 15 Nov 2006 @ 9:41am

News Corp will have the same problems as Youtube did, it was thought that due to the amount of copyrighted stuff posted onto Youtube potential takeovers would not happen because a legal battle would commence. It is similar with MYSPACE the most popular social networking site which has had numerous child sexual predator problems, realistically who would want to buy it. And to be honest give it 2-3 years and social networking won't be the in thing to do
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Glen, 3 Feb 2007 @ 1:03pm

Re:
I hear a lot of predictions that in a year or two social networking won't be the "in thing," but quite frankly I think that is a foolish way of thinking, most likely by someone too old to appreciate these type of websites. Groups have always been popular on the web. The web itself is a way of social networking. Forums, Blogs, and social networking sites like Myspace are the standard now. Later they may be diluted by competition or phased out by something better, but it will still and aways be social networking.
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