News Corp. Looking To Sell MySpace

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.

Comments

I'll throw in $50 if you'll just kill it

[elrous0]

Or, here's an idea, how about you remove those annoying sparkly custom backgrounds, autoplaying songs, pages that look like a 13-year-old girl threw up all over them, incredibly intrusive advertising, the overlapping spaghetti code of multiple scripts, and ridiculous clutter? You know...become Facebook.

Re:I'll throw in $50 if you'll just kill it

[tripleevenfall]

Hopefully without the impossible to decipher maze of privacy settings, security issues, harvesting user data for advertisers, etc?

Re:I'll throw in $50 if you'll just kill it

[Xacid]

Pretty much nailed it.

Ish.

Take it back to before facebook discovered apps and changed the layout twice a year. You know, when it was simple and did what it was supposed to do.

And yes, didn't look like my little pony and bratz got shoved into a blender.

Re:I'll throw in $50 if you'll just kill it

[tripleevenfall]

But you're right - MySpace's advantage was that you could meet new people there. On Facebook there's really no such convention. Myspace could try to reinvent itself as a simple, open platform that promises not to make their service an ad-serving platform.

Instead of "a place for friends", how about a secure, private place for "old friends and new friends"

Re:I'll throw in $50 if you'll just kill it

[elrous0]

my little pony and bratz got shoved into a blender.

That's a pretty good way of putting it. I still get headaches even thinking about some of the pages on MySpace. I had one particularly tasteless friend whose page would have given a Japanese kid seizures.

Re:Follow the leaders

[tripleevenfall]

Microsoft doesn't buy ruined companies, they buy decent ones and THEN ruin them.

Yeah, I read about this

[Quato]

I totally read about this on Facebook.

Re:Follow the leaders

[grub]

Microsoft doesn't buy ruined companies, they buy decent ones and THEN ruin them.

Two negatives makes a positive!

Overvalued ...

[gstoddart]

What I find most interesting about this summary is just how overvalued some of these companies became, and that someone actually was willing to pay that much:

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)

I mean ... bought for $580M and sold for $100M ... bought for $850M and sold for $10M ... those are really big differences in the valuations of these things.

This further reaffirms my belief that the 'market' has long ago given up on actual fundamentals of 'value', and mostly follow hype and become totally irrational. It's all funny money and speculation. I always though financial people were supposed to know better.

I can't wait until we 'learn' that neither Facebook nor Zynga are actually worth what people say they are now.

Re:Overvalued ...

[tripleevenfall]

AOL didn't become AOL by making smart business decisions.

They made it by doing things like thinking Bebo was a great product.

Re:Overvalued ...

[Anonymous Coward]

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.

Re:Overvalued ...

[jschottm]

I mean ... bought for $580M and sold for $100M

Sure, but consider that Google alone paid News Corp $900M during that time, News Corp still comes out ahead. Value and worth are funny concepts. MySpace might only have been "worth" $300 million to you if you were running a theoretical competitor at the time that News Corp bought it, but they turned around and made a nice profit on it, even at the higher price. And by buying it, they denied your company the ability to make that profit.

It's all funny money and speculation. I always though financial people were supposed to know better.

Small risk leads to small profit, large risk leads to larger profit. If you have perverse incentives that reward high risk behavior by financial people with little consequence for failure, that's what they're going to do.

Re:Shoveling dirt

[hubie]

So what is the over-under in years until we hear this kind of story about Facebook?

Wanted

[ackthpt]

Turd Polisher

No prior experience necessary, only 100m$

Re:Wanted

[Reilaos]

Turd Polishing: http://www.youtube.com/watch?v=yiJ9fy1qSFI

How much do the Mythbusters crew make per episode?

There is opportunity here

[lwsimon]

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

[tripleevenfall]

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.

Purchase Value vs.Sale Value Does't Equal Profits

[Anonymous Coward]

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.

My MySpace experience

[datavirtue]

Register..... Login..... Picture of Matthew McConaughey with his shirt off... never went back

Yeah, what failures!

[DesScorp]

Microsoft doesn't buy ruined companies, they buy decent ones and THEN ruin them.

Yeah, Bungie, Visio, and Hotmail sure dissapeared after Microsoft bought them. Oh wait...

Ruin, really? Before Google came along, Hotmail WAS webmail. And it's still hugely successful. Bungie helped fuel the rise of Microsoft's XBox empire. MS's purchase of Great Plains financial software has vaulted the Dynamics line from a small offering that caters to small offices to a large ERP suite that is increasingly muscling in on Oracle's and SAP's territory.

Looking at Microsoft's long history of acquisitions, it's hard to objectively say that most of them were busts. Most of them were purchased simply so that MS could integrate their products into existing suites. Microsoft bought Forethought.. the company that created Powerpoint.. for $14 million dollars. How much money do you think PowerPoint has made for Microsoft over the years? Me, I'd say that purchase has paid for itself many times over. And while you may hate it (and I certainly do), calling PowerPoint a a failure would be pure BS. It's The Standard in presentation software.

There are other numerous examples of now retired software products that, at the time, made tremendous sense to buy. FoxPro, for instance, was enormously popular, and made MS a lot of money. Ditto for Frontpage. For years, if you didn't know HTML, Frontpage was pretty much the way to get a web page up. Again, and it was tremendously successful in the market.

Here's a basic truth that we here at Slashdot are loathe to admit: Microsoft is a successful company because they've got some pretty smart people working there. All that money didn't just come from nowhere. They kinda know what they're doing over there in Redmond, you know?