Rumor: Yahoo In Talks To Pay Through The Nose For MySpace

from the punt dept

The departure of Terry Semel did little to excite Yahoo shareholders, who remain hungry for evidence that the company is taking serious measures to fix the company. Perhaps they should be careful what they wish for. It’s being reported today that Yahoo and News Corp. have been in talks about giving MySpace to Yahoo in exchange for a 30% stake in the whole company. No matter how you slice it, such a deal would essentially mean Yahoo paying News Corp. just under $12 billion for MySpace, given that Yahoo’s current market capitalization stands at about $37 billion. You could see why News Corp. would love this deal, seeing as it paid just $580 million for the company two years ago. As for Yahoo, this would be the ultimate act of desperation, seeing as its various social-networking acquisitions haven’t exactly paid off. While talks are still seen as preliminary, the other big winner in this deal would be the analyst that valued MySpace between $10 billion and $20 billion. At the time, it seemed crazy, but these are certainly crazy times.

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Comments on “Rumor: Yahoo In Talks To Pay Through The Nose For MySpace”

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Anonymous Coward says:

This rumor isn’t really a rumor at all. It was an analyst’s conjecture that he made after the Semel resignation. It’s not a leak or has any information grounded in reality yet. It was just something that a single individual said that he thought could be a good possibility of happening. What is yahoo going to do after it gets a stake in myspace with myspace having a multi-year exclusivity deal with GOOG advertising? Will they attempt to break that contract lie down and let their biggest competitor share in all the revenues with one of their subsidiaries? It just doesn’t seem very plausible and it seems more likely that people are pulling at straws to find any good news from yahoo since their stock and company have been in the toilet.

I just heard that Microsoft was looking into acquiring yahoo again. See I just started a rumor that has about as much factual backing at this one. Lets see the stock jump 20% again from it.

Brandon Watts (user link) says:

Crazy Times

When News Corp. originally acquired MySpace, the only thing that many of us could talk about was how incomprehensible the $580 million was, but if this deal with Yahoo! ever came to fruition, then News Corp. would come out to be the smart investor who made a quick and gigantically huge return on their investment, and in turn, we’d finally see which company is truly crazy.

MySpace is dying, but these financial figures don’t reflect that reality.

Brandon Watts
Criteo Evangelist

Derek Brown (user link) says:

Why the anamosity towards MySpace?

Who are these yokels that constantly think MySpace is over? MySpace has one of the largest social networking loyalties in the space. and FaceBook? Facebook is ridiculous! The user interface, options, and customization abilities are, well, archaic. How would ANYONE bump facebook above MySpace? I think that Yahoo has finally realized that their 360 model is just not going to cut it, and rather than rebuild the Ferrari, they might as well go ahead and buy it. It’s a space that Google has not stir up with too much vigar, so They are going to wreak first havoc. Works for me!

Yours Truly says:


Really? Come on now. As ludicrous as you think MySpace is and as much as you bash it and talk about the superiority of all the other systems I’ve never heard (besides Facebook) of, more people are on and use myspace. Sure its retarded, and sure its used by retards, but everybody and their mother, their dog, and their dog’s mother, has a myspace account. I’ve found people I haven’t seen in 10 years on myspace, that alone makes me wade through the unending advertising and rampant teen angst to mantain an account. $580 million was a smart investment, no matter how you slice it. If myspace attempts to innovate a little more (video conferencing, chat sessions, voip (maybe..), more control over profiles, more space, faster connections) they will continue to dominate the social networking status quo. But then again maybe they won’t.

p.s. handiest part of myspace, reminding me when birthdays are.

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