No matter who you are, losing $545 million on a deal is going to sting a little. That’s the difference in the price paid for Myspace today and the price paid by Rupert Murdoch and News Corporation six years ago.
Myspace, the once-popular social networking site, has been sold by News Corporation to advertising network Specific Media who have brought on board none other than Justin Timberlake as a part owner. Maybe it was his time playing Sean Parker on the Social Network inspired the actor/crooner to dip his toe in the social networking game.
News Corporation was the envy of many when it purchased Myspace for $580 million back in 2005 when the site was the number one social networking site in the world with 20 million unique visitors a month in the US alone. This number soon soared to 70 million but then along came Mark Zuckerberg and his Facebook project, which soon began to dominate and has since wiped the floor with Myspace.
With people leaving Myspace in droves to the newer and fresher Facebook, advertisers followed them. Once earning $605 million a year in advertising revenue, experts expect the site to make $183 million in ad revenue this year – which is not an insubstantial figure. “It’s a shame that Myspace’s value has diminished so severely since the acquisition; Myspace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,” Richard Rosenblatt, the chairman of Myspace at the time of the sale to the News Corporation, said in an e-mail to the New York Times.
In an attempt to re-establish itself as a major player in social networking, Myspace revamped its website last year and according to comScore the site still has 35 million visitors a month - though this pales in comparison to Facebook’s 157 million visitors. It is unknown what plans Timberlake and his partners at Specific Media have for the site but for the moment it will continue to operate as normal.
With online companies like LinkedIn being valued at huge figures and more likely to follow, this cautionary tale of how things can go wrong could prevent us seeing the same things happening all over again – but we doubt it.
Source: New York Times