In one of the biggest fire sales of the Internet age, News Corp. has unloaded MySpace for $35 million. Just four years ago, the social-networking site had a valuation of $12 billion.
News Corp. had reportedly been expecting a sale price of $100 million, which itself would have represented a huge drop from the $580 million the company paid for MySpace in 2005. MySpace's new owner is the ad network Specific Media, and News Corp. will get a minority equity stake in that company.
'Things Change'
Specific Media, based in California, said actor/musician/producer Justin Timberlake has made an investment in its company as part of an effort to revivify MySpace. Launched in 2003, MySpace was the most popular social-networking site from 2006 to 2008.
In addition to his entertainment career, Timberlake co-created the "denim lifestyle brand" William Rast and launched a spirits company called 901 Silver Tequila, the Tennman Records label, and the Mirimichi golf course in Tennessee.
Specific Media now has a platform to sell its ads to what is still a very sizable community, and it said it will unveil its plans for MySpace later this summer. Based on monthly unique visitors, MySpace had about 35 million visitors in May, while Facebook had nearly 160 million. The site also includes MySpace Music, with 38 million songs that are delivered to users via streaming music.
Michael Gartenberg, research director at the Gartner Group, said the price drop for MySpace is a "testament to how things can change so quickly in the social space." He added that, while the "days of MySpace as a dominant social space are over, the brand still has a core set of followers, primarily based around music," and it's conceivable that some sort of sustainable business model could evolve.
'Socially-Activated' Ads
Timberlake said "there's a need for a place where fans can go to interact with their favorite entertainers, listen to music, watch videos, share and discover cool stuff, and just connect." He added that "MySpace has the potential to be that place," and Specific Media said it will be working with Timberlake to evolve the site "into the premiere digital destination for original shows, video content. and music."
Specific Media, founded by brothers Tim, Chris and Russell Vanderhook in 1999, also said it intends to leverage the site's existing infrastructure to "deploy socially activated advertising campaigns, enabling brands to turn their campaigns viral by allowing users to share their favorite ads with friends."
At its height, MySpace had 300 million members. Facebook currently has more than half a billion members worldwide, and MySpace has about 100 million, with about half of that total in the U.S.
MySpace is not the only social-networking site to soar, be acquired, and then crash. AOL spent $850 million for Bebo in 2008, only to sell it later for under $10 million.
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