At $605M, with many investors giving these companies 15-20x sales valuations, you are talking $9-$12B valuation minimum .... and that's before the first day IPO spike to catch the 'next great unbeatable story'. It's really all about timing, sometimes for better (as Marc Cuban could attest to)... sometimes for the worse (Lycos anyone?).
- MySpace, the long-suffering Web site that the News Corporation bought six years ago for $580 million, was sold Wednesday to the advertising network Specific Media for roughly $35 million. The News Corporation, which is controlled by Rupert Murdoch, had been trying since last winter to rid itself of the unprofitable unit, which was a casualty of changing tastes and may be a cautionary tale for social companies like Zynga and LinkedIn that are currently enjoying sky-high valuations.
- The sale closes a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it acquired MySpace in 2005. At that time, MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook, which overtook MySpace two years ago.
- As users fled MySpace, so, too, did advertisers. The market research firm eMarketer estimates that the site will earn about $183 million in worldwide ad revenue this year, down from $605 million at its peak, when the site introduced many Web users and many advertisers to the concept of social networking.
- MySpace has tried to reboot itself several times, most recently as a social destination for music, movies and other media. It has not been abandoned altogether: it still has 35 million visitors a month in the United States, according to the measurement company comScore. Facebook has 157 million visitors a month in the United States.
[May 24, 2011: BW - The Rise and Inglorious Fall of MySpace]