MySpace Goes To Specific Media For $35 Million, CEO Is Out, reports Alexia Tsotsis, from TechCrunch. This is more than a 90% drop in value, after Newscorp paid $580 million for MySpace in 2005. Recently AOL, purchased Huffington Post for $315 million. I have a vague memory from about five years ago, that the WSJ estimated the value of Daily Kos value at $25 million.
Myspace CEO Mike Jones just sent out this mass internal email and press release confirming the company’s sale to Specific Media earlier this morning. Kara Swisher is reporting that the sale was for $35 million.
From what I’m hearing it’s been a rocky morning at the social network, which was bought by Newscorp in 2005 for $580 million, as job cuts went deeper than expected. The most significant departure? CEO Mike Jones will be leaving the company and is currently on a two month transition plan.
Myspace has steadily lost influence and value as Facebook’s “one graph to rule them all” campaign grew to dominate the space. On a more hopeful note, I’m also hearing that several of the laid off employees have already received calls from recruiters representing a mix of Silicon Valley and Southern California companies.
I believe MySpace has about 400 employees.
http://techcrunch.com/...
Here is the press release, attached to CEO's Mike Jones' letter to the MySpace community. I presume as a press release it is not constrained by fair use limitations of a few paragraphs.
SPECIFIC MEDIA ACQUIRES MYSPACE FROM NEWS CORPORATION
Los Angeles, Calif. — June 29, 2011 – Specific Media, a digital media company, today announced it has acquired Myspace from News Corporation. As part of the agreement, News Corporation will take a minority equity stake in Specific Media. Additional terms of the agreement are confidential and will not be disclosed.
“Myspace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online,” said Tim Vanderhook, Specific Media CEO. “There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest. We look forward to combining our platforms to drive the next generation of digital innovation.”
...
About Myspace
Myspace, Inc. is a leading social entertainment destination powered by the passions of fans. Aimed at a Gen Y audience, Myspace drives social interaction by providing a highly personalized experience around entertainment and connecting people to the music, celebrities, TV, movies, and games that they love. These entertainment experiences are available through multiple platforms, including online, mobile devices, and offline events.
Myspace is also the home of Myspace Music, which offers an ever-growing catalogue of freely streamable audio and video content to users and provides major, independent, and unsigned artists alike with the tools to reach new audiences. The company is headquartered in Beverly Hills, CA. http://www.myspace.com/...
About Specific Media
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. As people discover new ways to consume content, Specific Media creates impactful media experiences no matter where they are. www.specificmedia.com.
MySpace is one of the world’s largest social networks, with about 125 million users. Originally inspired by Friendster, MySpace quickly grew to become the world’s largest social network, before…
8:31 PM PT: Here's a link to a reporter who does a much more complete financial analysis, and history.
Doing the math on News Corp.'s disastrous MySpace years
By Anders Bylund
Once upon a time, MySpace was the king and pioneer of social networking. When Rupert Murdoch's News Corp. bought the company for $580 million, it looked like a steal. ... So what's the real damage to News Corp. from this botched online venture? Just subtracting the sale price from the original price tag and calling it a $545 million short-sale doesn't do it justice, ...
In 2006, the company happily highlighted that MySpace averaged 29 billion monthly page views in the US alone, boasting over 90 million registered users. ...
In this scenario, MySpace sales peaked in 2009 at something like $1.5 billion (out of $2.4 billion for the whole business segment). Operating losses start climbing right away, landing at $431 million in 2010 and adding up to $750 million. That tally stops in June of 2010, because News doesn't report segment results more than once a year.
So all things considered, MySpace has cost Murdoch's empire something like $1.3 billion. Even if my assumptions are way off, the final cost can't be less than $1 billion. That fiasco isn't putting Murdoch out of business: News Corp turned a $2.9 billion dollar profit in the last four quarters and generated $2.2 billion in free cash flow, for example. But it still stings as Murdoch's dreams of an end-to-end interactive media empire falls apart. And his shareholders have been trailing the broader market as well as rivals Viacom and Disney over those five painful years.
And now hated rival Facebook is getting ready to hit the stock market with a valuation perhaps topping $100 billion. That's hardly a camera finish in the race to dominate social networking.
8:44 PM PT: