Sailing the seas of social network IPOs is the good ship MySpace looking for a port in the internet storm, a new owner and new direction. Described over the last few months as “redundant, unnecessary and just not fun”, MySpace has been sold by Rupert Murdoch’s NewsCorp to Specific Media at a greatly reduced price of $35 million. On the homepage of Specific Media’s website is a play on a song by the Beatles, “You say you want a revolution” and I think that’s just what MySpace is hoping, to be pulled from the brink of obscurity.
MySpace introduced the world to social networking and at one point had over 20 million new users every month, once reaching the lofty height of 79 million users, but just could not keep up with Facebook. MySpace a cautionary tale, written by Chris Nenary, describes it perfectly; “MySpace had an Achilles heel, one shared by many Internet companies, including Facebook: What it offers isn’t essential. Fun? Yes Sure. Entertaining? Yes. Interesting? Sometimes. But who really needs MySpace?” Simply what happened to MySpace was Facebook who combating this same affliction works hard at keeping customers involved, offering them a stream of valuable items and services
MySpace laid off 30% of its staff, several of the visionaries abandoned ship and then another round of layoffs that was described by Mike Jones as a way to” create a more flexible organization that can accelerate product development and foster a culture of entrepreneurship and innovation.” However user numbers just did not respond to changes and now MySpace grows a little more tawdry and faded around the edges.
Rupert Murdoch purchased the company in 2005, News Corporation was the envy of other media companies it was the fastest growing company whose valuation was $9 to $12 billion, an IPO at that time probably would have fetched $15 - $25 billion. Is this a warning for investors to be wary of other social network purchases? Just around the corner is the long anticipated IPO of Facebook, who has 600 million users and is valued at over $50 billion, the MySpace story play a role in who invests and how much?