CYBERSPACE—A mere six years after purchasing MySpace for $580 million, News Corp today announced the sale of the struggling social network to an Irvine, Calif.-based digital media company for $35 million, ending one of the most precipitous corporate slides in recent memory. At the end of the day, and despite the backing of a powerful parent and projected international ad revenues this year of $183 million, MySpace could not compete with Facebook’s more flexible and immersive platform.
“It’s a shame that MySpace’s value has diminished so severely since the acquisition; MySpace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,” said Richard Rosenblatt, the chairman of MySpace.
Another shame is the news that a significant percentage of MySpace’s 400 employers were laid off today.
According to sources quoted anonymously by The New York Times, the property had become a distraction for the top brass at News Corp, which had already recouped its initial investment through an advertising deal with Google. Despite its sizable revenue, however, MySpace’s excessive overhead put it into the red and made it an albatross around the neck of the obsessively performance-minded News Corp.
As to why the forerunner of social network platforms—the granddaddy of online networking—fell so hard and fast, the reasons will probably be hotly debated for months and years to come.
In a long post titled “Was MySpace Downfall Inevitable? Plenty of Blame to Go Around,” Lee Brenner, the director of MySpace’s “Impact” section, wrote, “I’m sure most employees (former or current) will argue that it was poor management, or a need to hit revenue targets once News Corp. took over, or a bottleneck in the technology department, or lack of resources given to their division, or a poor public relations effort, etc., that set the course of MySpace’s downfall. Any number of these could be true. I suppose we’ll never know for sure. It is most likely a combination of these factors, along with a ‘low attention span’ public. It probably didn’t help to be doing business, and trying to grow, along with all of these issues, in the midst of a global economic crisis.”
As far as the future of MySpace future is concerned, Tim Vanderhook, Specific Media’s CEO, wrote Wednesday in a press release, “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. 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.”
In other words, MySpace is dead; long live MySpace!