News Corp: MySpace Worth $6 Billion
Andrew Meyer
43 comments »
In an investors meeting in Australia yesterday, Rupert Murdoch said that MySpace could now be sold for $6 billion — about a 10x return on the original $580 million that News Corp. paid for it.
In other news, one of the many MySpace alternatives, Facebook, is rumored to be in talks with IAC — or at least Zuckerberg (Facebook founder) and Jason Rapp (IAC SVP of M&A) were seen mingling together at the Foursquare conference in NY. Facebook has been in acquisition talks with Yahoo in the past, but either the price was too much or acquisition activity halted due to poor stock performance. A social network is something that the extensive IAC portfolio lacks, but I’m not sure Facebook with their primarily college demographic and steep price tag (rumored $2 billion) are the best fit. If I were IAC, I’d be looking at the well-branded (yet stagnant) Friendster — IAC’s network would breathe new life into Friendster, and the past rumored $50 - $100 million price tag pales in comparison to Facebooks’. Friendster has been up-for-sale in the past and holds actual patents on social networking, which likely will result in News Corp. paying licensing fees for in the future (once Friendster has rallied their legal case together, and once MySpace’s wallet, er, growth, plateaus — allowing Friendster to tap into a business worth much more than the $6 billion Rupert speaks of today).
Myspace shouldn’t be worth a penny since it barely works
Nice ROI, if you can get it. =)
I wish I could get $6 billion for creating the ugliest, crappiest, most broken piece of crap web site ever invented.
I definitely think News Corp should consider dumping MySpace - if not now, then in the near future, perhaps once its expansion into Japan and China begins to bear fruits and therefore increasing the overall value. Truth of the matter is, I feel that while social networking is a sustainable concept, service provides in this field seem to wax and wane over time.
Consider, for example, the case of Xanga which averaged 90 minutes viewing time per user in 2003, only to find itself looking at just 11 minutes in 2006. In the meantime, between October 2005 and October 2006, MySpace average viewing time (let’s call it AVT for short) per visitor decreased from 2h 30m to 2 hours, while, say, Facebook’s AVT/visitor increased to 1h 10m.
It might be a little bit too early to prophecise the immediate demise of MySpace, but I, for one, would be a little bit cautious about its future, since it is quite possible that MySpace, too, is going into the decline phase of the wax and wane trend (although expansion into Japan and China may increase its lifespan).
It’s definitely a fickle industry, but Facebook does have some advantages. First of all it’s huge in the US. Secondly, the core architecture seems fairly strong and the revenues are already pretty good. Lastly, it provides a different experience depending on how you use it.
Personally, I value these things for their utility, and a huge part of that is the network. A lot of people are on facebook.
How likely is it that Friendster will actually be able to enforce their social networking patents?
I know VCs like to see patents on a company’s list of assets, but please….
I’m not an expert on IP law, but isn’t it true that if you just bury your head in the sand and let others use your patent, you lose protection. Not sure if that’s for trademarks or patents. But it just doesn’t sound fair for Friendster to wakeup one day and start suing well-known companies that have invested millions, if not billions, in their Friendster-like websites.
I think facebook is taking too much chance on selling cos there lot’s of new players with better brand and wider reach coming on the scene like http://www.mediarati.com or http://www.veetube.com that wont mind selling for a small fraction of what is been asked and as such are likly to turn the market.
lol at the hidden spam up there^
Have you looked at Xanga at all? I am surprised why MySpace is such a big deal when it seems to be becoming passe even amongst its proponents. Xanga, another social network has ten times the features in a much better interface.
bill should buy it. just to piss people off.
Just because someone says their own site is worth $6B doesn’t mean its worth $6B. If anyone is interested, I have a useless domain that I think is worth $4.5B
Serious buyers please send your offer (min $4.5B) to uselessdomainforsale @ fool.com
Just cant help compare that self-worth with US Air’s worth of the grand international Delta Airlines at $8B. I’d probably still pay a Billion or two for MySpace just from its Ad Revenue prospectives.
what’s this ‘myspace’ site that people keep talking about? i keep going to myspace.net and there’s still nothing there yet…but have you guys tried tripod or geocities? there’s a rumor that google is also going to offer free home pages too! that’s exciting!
MySpace is a joke.
6$ billion? what a price! I dont know if this is the time of myspace declining.But i do believe people will change their habit (maybe from social networking like myspace and friendster to blogging?)..now,people are really going into blogging world right?its more personal..hmm by the way,people are becoming caring about privacy (yes,ive heard some news about unresponsible person taking pictures from another social networking site and put it on another using different nickname.especially girl with beautiful face:P). maybe soon or later there will no more social networking patent like this.I dont know,but i hope friendster will be there..hehe.(im malaysian,and most malaysians are using friendster instead of myspace hehe)..(-_*)
how a piece of crap like that can be so expensive.
i think myspace.com it’s anoying and a lil bad designed…
http://xemillon.blogspot.com
What crazy valuations like this make me think about is the over hyped era of days gone by.
I know that there is real money being made these days, thankfully, but that doesn’t mean people can’t get way ahead of themselves when they are evaluating a company like MySpace. Like everyone else is saying, it’s a crappy site that doesn’t really seem to have it’s act together…
Um, they should sell it then. Six billion dollars is a lot, even for News Corp (Market cap 22 billion)
a radical new approach by old rupert - maybe i should adopt this approach to governance and transparency - i therefore declare my own business is now worth upwards of $1bn - investors, form an orderly queue, please ….
fair dinkum, rupert! (ooops, sorry, he’s an american now, so that expression will mean nothing to him).
Rupert is a master of deception. Fox news had a major impact on the election in 2000. (After we voted) Politics aside, MySpace is a huge creaky monster. It’s shocking that it continues to hold its dominance when so many people complain about the experience. I think social networks for niche markets are a better way to go. I’d rather spend $25M on five small social networks with specific demos and have a total membership at 10 million, then $500M+ on a huge monster that’s impossible to manage.
http://www.pixelshrink.com
Regarding Zuckerberg and Facebook, I think he’s such a wildcard it’s very hard to say where they’ll end up. I don’t think economics are the motivation with him. Additionally I think IAC is going to be a much bigger player very soon.
http://www.roofcontractor.com
Note to News Corp: “SELL NOW”
No way in hell that anyone would pay that much for that pos right now.
*yawn*
I agree with everybody on this. MySpace has been a little overhyped, I don’t think it’s worth that much either. I’m sure it’s worth something, but not that.
>> re: IAC buying Friendster… that sounds on target.
IAC is the new CA: the purchaser or all #2-or-lower off-brand internet products & services.
if Yahoo really wants to downscale their acquisition budget, they could always buy SixApart. however, FaceBook seems like the asset they really need. the numbers game is likely the holdup.
and so we wait… sigh.
its worth probably about 1 billion. i wonder what kind of revenues they are drawing in. also - the obvious threat from valuepay2.com which will pay users to join their community of social media sites. like netscape does.. but for social networking.
Friendster was slow, which gave the opportunity for myspace, myspace has some issues, which now gives back the opportunity to Friendster. Eventually a Friendster acquisition will occur, and over time Friendster will gain back it’s a huge market share.
Conclusion, Friendster is a bargain at 100m, somebody will see this and buy it. What’s next? A Check out: http://SuperViva.com it’s like Friendster for goals and dreams.
Call me crazy, but I don’t think myspace is that badly designed. Sure, it allows for horrible design, but so does HTML, surprise surprise. You’re going to see good and bad. I keep my profile semi toned-down - it’s when you do the loud backgrounds and the invisible boxes and the awful color combinations that myspace goes from eh to ICK!
Well, I guess $6 billion is the price that someone would pay for the largest traffic site out there - especially when MySpace is so tightly integrated with people who are collecting email addresses for use with 3rd parties and generating an enormous amount of spam.
http://www.bitblogs.com/?p=27
It’s all right there in black and white.
Michael
What makes MySpace so pathetic are all the websites that attempt to imitate it by putting the word “My” if front of their website. I’m from Kansas City so lately two television stations have changed their names to “My”ksmotv.com and “My”foxfour.com.
Cingular’s “My” circle of friends on their phones.
24hourfitness.com’s “My”store.
“My”this, “My”that, “My”ass, “My”urine, “My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”"My”…………what’s the point?
If you can’t take the MySpace crowd and churn it into big bucks, then you’re a f*ckin moron. Who cares how bad the site is? Nobody. So STFU.
With that kind of user base, $6B could actually be a bargain. Just because y’all don’t know how that might happen, don’t mean it can’t.
OTOH, if you’re smart enough to make it worth >$6B, you probably don’t need to pay that much to begin with.
Naysayers be damned!
Awesome info, thanks