Wednesday, June 20, 2007
MySpace…Two Years and 2000% Appreciation?
by
Almost two years ago, Rupert Murdoch’s News Corp. bought Myspace for $580 million. The rationale, according to analyst Alan Gould, was clear: “With a significant amount of advertising dollars moving from traditional outlets to online, News Corp, like most media companies, is looking to boost its internet assets.”
Back when that transaction went through, a lot of people were still talking about how rapidly rising Web company valuations were pointing to a second Internet “bubble.” However, there appears to be no bubble regarding the value of MySpace, and it now seems Murdoch has the Midas touch. TechCrunch is reporting today that Yahoo may be considering buying MySpace in a stock deal worth $12 billion. As the article points out, analysts have already pegged the value of MySpace in excess of $10 billion, so this isn’t at all out of the realm of possibility. That’s almost 2000% appreciation in less than two years!
Even if the Yahoo deal doesn’t go through or is pure rumor, the analysts’ $10+ billion valuation of MySpace demonstrates that Murdoch, a shrewd 76-year-old media mogul from the traditional-media era, might also be one of the more percipient players in the new Web-based era.
