After years of attempting to variously reinvent, reorganize, and recapture the market space it's been losing to Facebook
is out the door. This isn't a surprise—News Corp declared it was ready to sell the segment last February. Now the social networking site is actually on the chopping block. News Corp is quite profitable, but the changes facing certain markets, particularly print, has likely contributed to the MySpace spinoff.
Several venture capital firms are expected to bid on the company, including Redscout Ventures, Thomas H. Lee Partners, and Criterion Capital Partners LLC. News Corp reportedly wants at least $100 million for it, having paid $580 million for the website in 2005. In February, News Core took a non-cash $275 million non-cash hit, citing "the impairment of goodwill related to the Digital Media Group and an organizational restructuring at MySpace.”
When News Corp
first acquired MySpace, it was deemed a potentially smart investment. The website dominated social networking from 2005 and maintained a traffic lead over Facebook through 2007. Then MySpace made what might be the worst business mistake of the past 10 years—it let anyone make webpages.
You know what this layout needs? SPARKLES!
HTML may not be the most serious of serious business, but surfing the site became the real-world equivalent of touring Dante's Inferno. First you waited for the background to pop in. Then "Loading Audio Plugin." After ten minutes, just as you've become convinced that your computer must be off cutting a record, your browser crashes.
Because you still possess a few small feelings of goodness toward the person whose profile you wanted to visit, you reload the site. It crashes. You reboot, and open the webpage. "Loading Audio Plugin..." dominates your life (and your CPU's processor) for about a week. Eventually, the site loads. You attempt to scroll down. It freezes.
Look at the kitty. Loook. Loooooooooooooooook. See? That didn't take long!
Thus begins a game of cat-and-mouse with the processor, which has cut its record, gone triple platinum, and is now touring the Midwest. The goal is to move it towards the link you actually want to click on during those half seconds when it isn't assigning all its IRQs to hell
and cutting deals with Satan.
Finally, you're able to click on "Message," which will at least carry you to a page not constructed from the cursed bones of Irish dockyard workers who built the Titanic at Harland and Wolff. The mouse pauses. Stutters. And without any warning, your speakers explode with a heavenly combination of visual kei, Type O Negative, and polka. It's 2 AM—welcome to MySpace.
On a slightly more serious note, MySpace's primary value is in its brand. Unfortunately, it's the brand of a product people stopped using because they didn't like it anymore. Granted, there are companies in worse positions—we're fairly certain that all MySpace employees open each day by chanting: "At Least We Aren't AOL," but Facebook as acquired a reputation as the more mature version of FB. MySpace's attempt to recast itself as a music and rich content hub driven much interest to the site. It's still strong in certain demographics and possibly in other countries, but VC firms looking for a good buy may be more interested in selling off the company's assets than in anything else.