So News Corp have managed to offload MySpace at last. Reports reckon ad-agency Specific Media have paid c$35m in stock and cash. Basically looks like News Corp wanted shot at any price.
Back in 2005 News Corp paid $580m for MySpace which was then the lead social networ
king site. Murdoch had great plans to take over the world with the site. Now MySpace (see chart from Silicon Valley Insider showing the rise and fall of Myspace v the rise and rise of Facebook) is but an also ran to the mighty Facebook which, to all intents, wasn’t even available to the general public in 2005. MySpace’s problems came when they tried to commercialise the venture. Users just didn’t like it – particularly when they could move to advert-free sites like Facebook. And that’s now Facebook’s major dilemma. How do you fully exploit the commercials without alienating the users?
I think Zuckerberg and Sandberg are savvy enough to avoid the MySpace problems. But it still shows what pitfalls lie ahead. If MySpace can lose over 95% of its value over 6 years, with Facebook potentially valued at $100b, the downside risks are huge.