Is News Corp. Looking To Sell MySpace?

from the buy-low-sell-high dept

News Corp. boss Rupert Murdoch told investors in Australia yesterday that the company could sell MySpace for $6 billion now, a more than tenfold premium over the $580 million it paid for the social-networking site last July. A Wall Street analyst said a couple of months back that the site was worth $10 billion to $20 billion, though many people struggled to see the justification for such a high figure. But there’s a bigger question: why does it sound like Rupert’s using the Skype billion-dollar buyout plan of tossing out ridiculous valuations and asking prices for your company — you know, the one that worked so well recently for YouTube. Could News Corp. be thinking of unloading MySpace, and Murdoch is trying to drive up the price? While such a scenario seems unlikely, it is an interesting possibility. Despite MySpace’s place at the top of the social-networking space, its ownership by News Corp. has been characterized by missteps, misunderstandings, talk of inflated traffic numbers, and a strategy to make new media more like old media. While Murdoch may not understand the internet, he’s proven himself to be a very shrewd businessman — and engineering a $5.4 billion profit on MySpace in just over a year could be a pretty smart way to play the social-networking space, given the here-today-gone-tomorrow nature of many of its sites.

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Comments on “Is News Corp. Looking To Sell MySpace?”

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Anonymous Coward says:

Perhaps worth $1.5-2 Billions

Given that Google paid $900 million to deliver ads on MySpace, it might be worth paying $1.5-2 Billion. At that price, Microsoft might find MySpace attractive, if they can get out of the Google ad contract as new owners. Alternatively, Google could buy MySpace for $1.5-2 Billion, considering they would be paying themselves $900 million for the ads they serve.

Yahoo might consider buying MySpace, but knowing them, they are sure to pass this one up too. So, let us not consider them.

Bob says:

What a joke

If Myspace is so valuable, why is it littered with borderline porn rather than mainstream advertising? All it is is another one-pager free homepage site. It amazes me that corporations can justify big bucks for any of these type of site. Google buying Utube – big mistake. Remember @Home buying excite and Blue Mountain ecards? Where are they now?

Josh Chandler (user link) says:

News Corp will have the same problems as Youtube did, it was thought that due to the amount of copyrighted stuff posted onto Youtube potential takeovers would not happen because a legal battle would commence. It is similar with MYSPACE the most popular social networking site which has had numerous child sexual predator problems, realistically who would want to buy it. And to be honest give it 2-3 years and social networking won’t be the in thing to do

Glen says:

Re: Re:

I hear a lot of predictions that in a year or two social networking won’t be the “in thing,” but quite frankly I think that is a foolish way of thinking, most likely by someone too old to appreciate these type of websites. Groups have always been popular on the web. The web itself is a way of social networking. Forums, Blogs, and social networking sites like Myspace are the standard now. Later they may be diluted by competition or phased out by something better, but it will still and aways be social networking.

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