MySpace sold last week for just $35 million dollars, just four years ago, speculation was the site could be worth as much as $12 billion. This is a fair warning to Groupon and Facebook investors and a salutary lesson for Newscorp who paid $580 million in 2005 for one of the leading social media sites of the day.
This is a great “Chart of the Day” from the US Business Insider demonstrating the life cycle of MySpace and the growth of Facebook.
Specific Media, a digital media company, announced last week, it had acquired Myspace from News Corporation. Specific Media “is a digital media company driving viewership for content owners, engagement for brands and relevance for consumers. With capabilities spanning original programming, cross-channel distribution and addressable advertising, the company connects audiences, content and brands, adding meaning to each touch-point.” Sounds great but is $35 milllion such a good price.
According to Ars Technica, MySpace enjoyed revenues of $1.1 billion in 2010 and managed to burn $431 million. The total cost to the Murdoch empire is something like $1.3 billion over six years.
It’s a sector for great vision and deep pockets.
TechCrunch - Is MySpace worth $12 billion.
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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.
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