It sure as hell might be. We’ve gotten independent confirmation of rumors circulating yesterday that discussions between Fox and Yahoo, where Yahoo would effectively buy MySpace for 25% of the stock in the combined entity, have occured. Whether Yahoo can stomach that kind of transaction right now is another matter, of course. And Fox may have less interest (or more) now that Semel has stepped down. We’re hearing that the change in leadership makes no real difference to either side right now, and that the probability of a deal remains “low.”
But if the transaction were to happen, that would value MySpace at a cool $12 billion based on the current value of Yahoo. That’s a not bad return on Fox’s initial investment of $580 million in the site (plus a few other properties), which they bought only two years ago. And it will certainly signal that other social networks, particularly Facebook, are worth far more than most people currently estimate. Remember, just last year Yahoo only valued Facebook at about $1.5 billion.
Industry analysts have been pegging MySpace stock at north of $10 billion since late last year. The underlying financials and user numbers support the deal. But is it a good idea?
Would this be a good move for Fox? Yes. Diversification away from a service that suddenly looks vulnerable to Facebook.
Would this be a good move for Yahoo? No. There is no silver bullet for their woes.
Yahoo could certainly use the massive page views and user numbers, and they could kick Google out of that search deal from last year (or also hand search over to Google, as some rumors are saying). But they need to focus on strategic acquisitions and a real game plan going forward. To try and hit one out of the park with a monster acquisition, perhaps just as the MySpace star is fading, would be monumentally stupid. Their shareholders would be much better served if they let Microsoft buy them. And their users would be much happier with a Facebook merger, or no merger at all.
This would make no sense since Myspace has a $1 billion deal with Google. What would they do with Myspace if they can’t put their own ads on it. They minus well just buy Facebook for $3 billion
Myspace is now a fading property — at least in mindshare. This would be a huge poison pill for Yahoo to just integrate it into their offerings.
Is the issue finding new venues for advertising? They’re not even monetizing their current properties correctly much-less jumping into the cesspool of myspace.
WOW.
That would sure stir the pot!!
ryan – rumor is that the deal can be terminated. Not even officially signed yet.
12 billion?
Say it again.
—–12——Billion.
Completely absurd…whoever would pay that deserves failure.
I don’t know though, I think Myspace is turning into the next Friendster. I don’t know anyone that uses Myspace expect for the perverts. I think $12 billion is way to much and could kill Yahoo.
I’m not a MySpace fan myself, but it needs to be remembered (in relation to the above comments) that MySpace is the leading site online, or in the top 3 depending on what figures you look at. Yahoo desperately needs those users and that traffic, the $12 billion may be a lot, but we’d be looking at a script deal so no actual money would change hands, and it would be a Win-Win for Yahoo and News Corp.
Now just imagine this: Google loses search on MySpace ($1b over 3 years) and News Corp decides that Google News shouldn’t be listing News Corp news in Google News because it wants to strengthen Yahoo, sure it could end up in a messy legal battle but end of the day the one company who will lose the most out of this either way is Google.
Also I’d think that Google would also look to buy Facebook as a consequence, they couldn’t afford to be out of the game in a Yahoo/ MySpace/ News Corp tie-up, and Orkut is only popular in Brazil.
I suppose it’s worth whatever someone will pay for it. I wouldn’t be the least bit surprised to see Yahoo make yet another bad move.
MA – the Wesabe post based on the embargoed press release made it into my RSS reader and onto my site. Take a look if you’re interested.
Hey Mike,
I just read your interview in NewsWeek – dressed all fancy in your suit and cigar. Yahoo should buy 25% of you!
Nice interview.
P.S. Facebook will never become more valuable than Myspace.
MySpace has been killed by spam. If you don’t have a private profile, you’re inundated with spam and friend requests from pornbots every time you login. A private profile breaks a lot of the functionality of Myspace.
Facebook remains better than MySpace because it still works as a social network. There seem to be less spammers on facebook and they have much better technology for eliminating spam messages and fake accounts.
If this is true, executives have too much time on their hands dreaming of easy deals. They need to quit looking at all the wild ad revenue extrapolations, and acknowledge the probability of myspace having 0 revenue in 5 years is not insignificant. With all of Yahoo’s resources, couldn’t they come up with something better than myspace in 6-12 months? We’re not talking theoretical physics here- we’re not even talking tough programming. Yes, myspace has the community but just give the community features/incentives to go elsewhere.
Yes, it’s a tougher row to hoe, but somebody will do it. It’s only a matter of time…and my guess is that time is less than a 3 years with 100% probability.
you guys are looking to deeply into this. YAHOO NEEDS TO MERGE WITH MSN.
I think google could (and will) develop data driven social networking that woudl get gobbled up like stuffing on Thanksgiving.
That’s an awfully large acquisition for Yahoo to swallow. On the surface, Microsoft buying Yahoo! seems a more likely scenario but who really knows except for the dealmakers inside the companies themselves.
Then Google and Microsoft can battle it out for Facebook and MySpace.
Wouldn’t you expect an acquisition like this from Yahoo? It may simply mean the accelerated meaninglessness of MySpace. But do any of us really think Facebook is a clear winner? I doubt it (unless you hold equity in Facebook … and even then).
The social network that we’ll all be talking about in 5 years doesn’t exist yet. Might be on the drawing board (perhaps at Google, perhaps at Microsoft, perhaps even at IBM), though.
Yahoo read stuff like this. They will go buy Digg instead of accepting TC blogs.
Jerry Yang have same nerd brain as bill gates. Do nerds rule the industry?
for the love of god, don’t do it Jerry! Go for FaceBook. As Michael mentioned after the Semel announcement, technology should take over hollywood, not the other way around.
facebook is a technology-first social network, where mySpace is a porn-infested, hollywood-based disaster that will eventually lose to facebook.
i am a yahoo! fan and a jerry yang fan, but if this deal goes down, only microsoft will be left to balance google’s strength. who cares about the google/myspace deal anyways. what is the saying, “you don’t cut off your nose to spite our face” or something like that.
Terry Sign off as CEO. He fears Bill Gates.
Maybe Jerry or Bill Gates wants MS Yahoo or Yahoo MSN. Secret Merger still unknown…
$12 Billion, what!!!!!
Isn’t that an argument for bubble 2.0?
I think that Yahoo! should consider a deal with Microsoft and forget MySpace. As everyone said, MySpace is loosing speed and $12 is too much for what could be a big failure.
Value is still user base. Regardless of how many independent user profiles exist, myspace picks up nearly 3 million pageviews per day, and 45 percent of them are from a user between the ages of 18 and 30.
I agree that myspace is headed for trouble, though. It may have the user-base but it hasn’t harnessed the power of a social network the way facebook has. Whats far more compelling about facebook is that its actually not a social networking site per se. Ask Zuckerberg and he’ll say social utility site. A place where your movement, actions and mood-swings are to be logged in an objective framework.
This voyeuristic nature of a facebook visit contrasts starkly with the exhibitionism found in any Myspace profile. Myspace is about making a statement about your personality using pictures, layouts, music, cultural references etc. While all this can be had (to some lesser extent) in facebook, its
not the sites central offering. Facebook profiles you, with its “Mini-feed”.
The growing trend in logged activity points to a new direction in social networking which Myspace will have to ‘face’.
“industry analysts have been pegging MySpace stock at north of $10 billion since late last year. The underlying financials and user numbers support the deal.”
…..really?? I don’t buy this to be honest.
Yeah, I agree that MySpace is on the down while Facebook is on the up&up. If it was my money I would fight hard for a FB deal.
Everyone I know is either on Facebook or is headed in that direction. While you can’t deny the shear volume in page views that MySpace currently does, its only a matter of time before it jumps the shark. Facebook is just better!
I just don’t see $12B as a smart long term investment for Yahoo.
Ok, what I dont understand about these valuations is why are they so high when THESE COMPANIES(FACEBOOK, MYSPACE), DONT OWN ANY CONTENT? I think its very risky to invest in a company, where in theory myspace could be out of business if all of its users to decided to jump ship. I realize this highly unlikely, but its still risky. I also realize that myspace does have access to mounds of content from fox, but old media is so stingy, will they be brave enough to share the “quality” content for FREE with its users, NOT! So once again I will plug ABSTRACT10.com, because I feel like the companies with a user generated model along with proprietary content creation is where the future is. If there is anyone in the online video space that needs content hit us up at abstract10.com or email me jbirdmobi@yahoo.com. We are looking to partner with anyone in this space!
thx
Jason Jenkins
The Abstract Surrealist
That’s not good at all. MySpace will die soon, why the … Yahoo want to buy it? If they don’t know what to do with that money, better buy 25% of FaceBook which will be very giant soon.
Myspace will have its demise coming soon its getting overun with fake users and pedos. I dont live facebook either BUT i believe that it is getting better and eventually with a few more features could take over myspace… but $12billion for myspace? come on…
they should get facebook for 1/4th of that amount instead
not a good deal for yahoo… if this happen
Myspace has turned into spam space. I never check it anymore & neither do my friends. These fella’s (yahoo, google, ext.) need to spend more time looking for whats next not what has already been. Wake up Uncle Money Bags!!!
Its Colossal!!!!!!!!!
myspace is a joke. it was a good concept but it can be taken further!
don’t pay a dime for the concept. they would only be paying for the spam-ability of its customer base… how lame
spam-base != web 2.0
No money to pay it…
You would think people learned from 90s when web bubble popped while taking down many online companies. Maybe if they pay in monopoly money. They said AOL was going to be a way people will connect to the web. Exactly.
The numbers of visitors / pageviews /
– maybe worth 3 billion.
– Too many negatives (site design, user mentatlity…)
Yahoo; please dont buy this. Atleast for that much
Myspace needs so much work, and Fox sits on its hands as the thing tumbles out of control. For such a valuable popular website, you think they would spend more time fixing it up.
I’m sure Yahoo would better take care of it and listen to its users, instead of launching a “Myspace Editor” that only lets you slap Die Hard ads on your page. Way to alienate everyone. Most of what the users want is simple: they want more customization and privacy options, and no ads to ugly up their profiles. The truth is Myspace doesn’t need to advertise at the top of every page because the interface is packed full of Adsense, jiggling Flash and blinking buttons. They can’t justify it anymore with, “Hey, it’s so expensive to pay our bandwidth bills.” Mark my words, that ugly banner at the top of every profile is on the way out.
It would be insane, dumb and makes no sense. It wont happen. MySpace will die if it doesnt focus back more wholeheartedly on how it originally created success* – Music.
*thats if you exclude the database of 50 million email addresses that the starters used to initially get traction using their email marketing company…
This would be the digital equivalent of the LA Galaxy drafting Beckham and expecting him to score goals.
what happened to bebo??microsoft swallowing or what???
Call me a hater, but I think MySpace is going to go the way of Friendster in pretty short order. The interface is lame, the code is lamer. More and more of my formerly MySpace-only friends are on Facebook. Everyone I’ve talked to is observing the same phenomenon.
Facebook’s new platform architecture is just one more nail in the coffin of an obtuse, klugy social network that was never worth all the hype. If Yahoo buys it for $10b, their investment will be badly misspent.
So let’s see, Yahoo! just changed hands, it’ll be a good time to see how Jerry will hold onto the reins.
You guys are all part of the tech industry. If you spent some time in the real world, you’d realize that Myspace is not dead. The growth may have subsided a bit, but that’s just because everyone and their immediate neighbors already have a profile.
I’m 28 and I can tell you Myspace is just as relevant as it ever was. If you want to talk tech and applications and platforms, sure Facebook probably is better. But all my college and high school friends from San Diego up the coast through to New York, use Myspace more than they do email.
That’s not to say Myspace doesn’t have it’s faults – but it surely isn’t going anywhere and it’s not even close to losing the battle to Facebook.
I think myspace isnt worth that much. I think Yahoo and Microsoft need to merge and then purchase facebook. By way of this, Google can buy myspace and in the long run, not have the stability of Microshoo. (Microsoft and Yahoo!)
Hrm, fox? I think you might mean News Corporation. The ex-Australian (but still listed on our exchange) company owns Fox.
I think users would like a facebook merger more but, yahoo could possibly bring myspace back to life. That’s a pretty big could though.
good