Rumor: Yahoo In Talks To Pay Through The Nose For MySpace

from the punt dept

Wed, Jun 20th 2007 8:09am — Joseph Weisenthal

The departure of Terry Semel did little to excite Yahoo shareholders, who remain hungry for evidence that the company is taking serious measures to fix the company. Perhaps they should be careful what they wish for. It's being reported today that Yahoo and News Corp. have been in talks about giving MySpace to Yahoo in exchange for a 30% stake in the whole company. No matter how you slice it, such a deal would essentially mean Yahoo paying News Corp. just under $12 billion for MySpace, given that Yahoo's current market capitalization stands at about $37 billion. You could see why News Corp. would love this deal, seeing as it paid just $580 million for the company two years ago. As for Yahoo, this would be the ultimate act of desperation, seeing as its various social-networking acquisitions haven't exactly paid off. While talks are still seen as preliminary, the other big winner in this deal would be the analyst that valued MySpace between $10 billion and $20 billion. At the time, it seemed crazy, but these are certainly crazy times.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

17 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Dan, 20 Jun 2007 @ 8:29am

MySpace is OVER! It would be much better if yahoo bought facebook. They could probably get a better deal, and a less retarded userbase, and a really nice platform all in one swoop. (and, i could finally integrate my flickr profile into my facebook one)
[ link to this | view in chronology ]
Anonymous Coward, 20 Jun 2007 @ 8:33am

It would certainly be interesting to see this in maybe 10 years, when myspace is worth next to nothing.
[ link to this | view in chronology ]
Anonymous Coward, 20 Jun 2007 @ 8:36am

apparently none of these executives use myspace, because in the past year, about a quarter of my friends have left for facebook, and I have all but stopped using it as well.
[ link to this | view in chronology ]
Sanguine Dream, 20 Jun 2007 @ 8:38am

Too much money...
Frankly I think Yahoo may be better off building its own social networking site. MySpace is played out and the Facebook userbase may not like the sudden change.

And as for these analysts (which must be latin for rumor mill) I wonder if they get a cut of these massive deals that they come up with.
[ link to this | view in chronology ]
John, 20 Jun 2007 @ 8:58am

I find it hard to believe MySpace was ever worth $580M. Has News Corp made a return on that investment?

I can't believe anyone uses that site, much less would buy it. It reminds me of a web page on Geocities circa 1997.
[ link to this | view in chronology ]
- Anonymous Coward, 20 Jun 2007 @ 9:23am
  
  Re:
  I think the possiblity of this buyout is going to be the closest thing News Corp. will get to a return. I really hope Yahoo go through with this.
  [ link to this | view in chronology ]
Noah, 20 Jun 2007 @ 9:03am

Lately with all the new apps. on Facebook it is starting to seem a bit "myspace"ish. I think the best thing for yahoo would be to buy Zwinky.
[ link to this | view in chronology ]
Bob, 20 Jun 2007 @ 9:08am

One thing I don't understand. How do people arrive at 10 billion dollars as a value. That seems like such a large number.
[ link to this | view in chronology ]
Anonymous Coward, 20 Jun 2007 @ 9:29am

This rumor isn't really a rumor at all. It was an analyst's conjecture that he made after the Semel resignation. It's not a leak or has any information grounded in reality yet. It was just something that a single individual said that he thought could be a good possibility of happening. What is yahoo going to do after it gets a stake in myspace with myspace having a multi-year exclusivity deal with GOOG advertising? Will they attempt to break that contract lie down and let their biggest competitor share in all the revenues with one of their subsidiaries? It just doesn't seem very plausible and it seems more likely that people are pulling at straws to find any good news from yahoo since their stock and company have been in the toilet.

I just heard that Microsoft was looking into acquiring yahoo again. See I just started a rumor that has about as much factual backing at this one. Lets see the stock jump 20% again from it.
[ link to this | view in chronology ]
Sean, 20 Jun 2007 @ 9:44am

Social Networks (and the internets) are Dead
Good luck to all the .com and web2.0 bubble bursters
[ link to this | view in chronology ]
Brandon Watts, 20 Jun 2007 @ 11:25am

Crazy Times
When News Corp. originally acquired MySpace, the only thing that many of us could talk about was how incomprehensible the $580 million was, but if this deal with Yahoo! ever came to fruition, then News Corp. would come out to be the smart investor who made a quick and gigantically huge return on their investment, and in turn, we'd finally see which company is truly crazy.

MySpace is dying, but these financial figures don't reflect that reality.

Brandon Watts
Criteo Evangelist
[ link to this | view in chronology ]
Derek Brown, 20 Jun 2007 @ 1:08pm

Why the anamosity towards MySpace?
Who are these yokels that constantly think MySpace is over? MySpace has one of the largest social networking loyalties in the space. and FaceBook? Facebook is ridiculous! The user interface, options, and customization abilities are, well, archaic. How would ANYONE bump facebook above MySpace? I think that Yahoo has finally realized that their 360 model is just not going to cut it, and rather than rebuild the Ferrari, they might as well go ahead and buy it. It's a space that Google has not stir up with too much vigar, so They are going to wreak first havoc. Works for me!
[ link to this | view in chronology ]
Anonymous Coward, 20 Jun 2007 @ 2:51pm

Yokels are exactly who are left on MySpace. MySpace is the Members Only jacket of the online space.

I can't believe it when I run across a band that still uses MySpace over an owned domain. Talk about advertising your mediocrity.
[ link to this | view in chronology ]
- Charles Griswold, 20 Jun 2007 @ 3:42pm
  
  Re:
  I can't believe it when I run across a band that still uses MySpace over an owned domain. Talk about advertising your mediocrity.
  Counterpoint: Weird Al has a MySpace account. He also has his own domain.
  [ link to this | view in chronology ]
Anonymous Coward, 20 Jun 2007 @ 3:49pm

I think this move shows that the REAL problem with Yahoo! is its board of directors.
[ link to this | view in chronology ]
Lucretious, 20 Jun 2007 @ 4:41pm

bah
Until someone gets a handle on the spamming abuse inherent on these types of sites none are going to amount to anything more than an electronic business card. The people who matter have left MySpace long ago. It hasn't been considered hip in a long, long time.
[ link to this | view in chronology ]
Yours Truly, 29 Jun 2007 @ 4:26pm

Really?
Really? Come on now. As ludicrous as you think MySpace is and as much as you bash it and talk about the superiority of all the other systems I've never heard (besides Facebook) of, more people are on and use myspace. Sure its retarded, and sure its used by retards, but everybody and their mother, their dog, and their dog's mother, has a myspace account. I've found people I haven't seen in 10 years on myspace, that alone makes me wade through the unending advertising and rampant teen angst to mantain an account. $580 million was a smart investment, no matter how you slice it. If myspace attempts to innovate a little more (video conferencing, chat sessions, voip (maybe..), more control over profiles, more space, faster connections) they will continue to dominate the social networking status quo. But then again maybe they won't.

p.s. handiest part of myspace, reminding me when birthdays are.
[ link to this | view in chronology ]