Wednesday, January 12, 2011
Poor Rupert Murdoch: MySpace is Over—Boo-Hoo
at 6:00 AM
Poor Rupert Murdoch—his $580 million investment in MySpace proved to be a bust: A week after Goldman Sachs Madoffed 1% of Facebook for $500 million, MySpace is halving its staff, laying off 500 computer geeks.
In other words, from an online place where people could connect, MySpace was turned into an online place where people could compare shopping and wish lists—and where’s the fun in that, in this age of no-money, no-credit, no-fun?
Only a suit would think up this ridiculous business model—which is exactly what Murdoch had in place: A suit. CEO Mike Jones’ vision to revamp the News Corp. property was to accelerate the monetization of the site, instead of building it first, then sucking it dry . . . or rather, building it up first, then sucking dry the investors fool enough to sink money into it.
Like Goldman did with Facebook. Goldman knows what it’s doing—banging the dinner bell for investors, and selling shares on the shadow equities market, carefully curtailing the possibility of price discovery, and thereby monetizing Facebook at a $50 billion valuation.
Murdoch and Jones? No such skills.
The Hourly G recognizes that no one gives a rat’s ass if some mean and boring old fruit like Murdoch loses a few paltry hundred million dollars, and his suck-up suit gets tossed out on his ear. Hell, at heart, we really don’t care for the 500 geeks thrown out onto the Beverly Hills’ street, where MySpace was based—
—but what is interesting is the speed with which assets balloon in price, then deflate, in the Age of Virtual: Time was, MySpace was considered the winning bet, and Facebook the also-ran.
Update, 4:45pm, EST, 1/12/11:
Bloomber is reporting that, in a company-wide staff meeting, CEO Mike Jones said that News Corp. is “assessing a number of possibilities including a sale, a merger and a spinout.”