News Corp. Can't Give MySpace Away
MySpace, the long-floundering social networking site acquired by Rupert Murdoch's News Corporation for $580 million in 2005, has been planning a mid-2011 sale for some time, though interest has been decidedly low. Last year alone, ad spending dropped 37 percent, while they lost 15 percent of total users, as compared to Facebook, which was up 50 percent over the same time period. MySpace operated at a loss of over $150 million, with $70 million less in advertising year-over-year, for the quarter in ending in September 2010. They lost 10 million users in two months. In other words: dismal. Bad enough that now, News Corp. is considering gifting the whole thing to Vevo.com, which is owned by a group of large record companies. As in, for no money.
In the exchange, News Corp. would get only a "stake in the new venture," Bloomberg is reporting:
Vevo.com, which offers advertising-supported music videos, could draw on MySpace music assets, including artist and fan pages, the people said. Vevo was introduced in December 2009 and is owned by Vivendi SA (VIV)'s Universal Music Group, Sony Music Entertainment and Abu Dhabi Media Co. Sony Corp. (6758) and Universal Music also are investors in MySpace Music, the part of the social network that streams songs online. ... Vevo is the Web's fifth-biggest video destination in the U.S. with 45.9 million visitors in February, according to ComScore Inc., an Internet researcher based in Reston, Virginia. The website would gain control of MySpace as part of a wider agreement with News Corp., owner of the Twentieth Century Fox film studio and Fox broadcast network, the people said.
The fifth-best video service with the (approximately) 21st-best social network? Foolproof.
Get the ICYMI: Today's Top Stories Newsletter
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in New York, delivered to your inbox.