MySpace Sold At A Big Loss By News Corp.
The social media website MySpace has been sold by News Corp. to the advertising firm Specific Media for an undisclosed sum, although there are suggestions that it got over $500 million less than it paid in 2005.
MySpace was bought by Rupert Murdoch’s News Corporation in 2005 when it was at the height of it’s popularity and was by far the leading social network. They paid $580 million for the site and it’s millions of users.
Unfortunately for MySpace there were a couple of startups just around the corner which would rapidly steal it’s thunder, it’s advertisers and it’s users. They were Facebook and Twitter.
Speaking from a personal perspective, I looked at joining MySpace around that time but found the site messy, cluttered and confusing; I didn’t use it.
Then along came Facebook which followed Google’s clean design, it was simple, clean and effective; I signed up straight away.
That, in a nutshell was MySpace’s problem. Although it tried to reform (including recently integrating with Facebook connect) and reclaim lost ground it effectively turned into a site that was, in the public perception anyway, predominately centred around music promotion.
Job losses followed and News Corp’s CEO said financial losses at MySpace were unsustainable, hence the sale for a fraction of the purchase price. It is understood however that as part of the deal, News Corp. will take a minority stake in Specific Media.
It is unclear what plans Specific Media have for the site but it is understood that the pop star/actor Justin Timberlake now has a stake in the business and will help develop a strategy.