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.