News Corp. lost a quarter of a billion dollars on Myspace

By on August 12, 2011, 12:30 PM

In a recent News Corp. conference call discussing the company’s fiscal fourth quarter earnings, it was disclosed that the media conglomerate had lost $254 million on the purchase and subsequent sale of social networking site Myspace.

Less than two months ago, Specific Media purchased Myspace for a mere $35 million from News Corp, a far cry from what the company had originally paid for the site.

The rise and fall of Myspace has been one of the most fascinating tech stories of the past decade.

News Corp. bought Myspace for $580 million in 2005. Initially, the deal paid for itself after Google inked a three-year $900 million search advertising deal the following year. At the time of acquisition, Myspace was still growing and became the largest social network in the US a year later.

The fame was short-lived as rival Facebook was gaining popularity. In September 2006 Facebook opened their doors to anyone over 13 with a valid email address. Two years later Facebook had surpassed Myspace as the most popular social networking site in the world.

Since then, Myspace has become less and less relevant as a social network and is now largely considered a failed Web property. Facebook was nearly double the size of Myspace at the beginning of 2009 and just earlier this year, Myspace was forced to cut half of their staff.

According to Digital Trends, new owners Specific Media and Justin Timberlake hope to retool the failed site into an outlet for musicians. A news conference is being planned for later this summer to outline the details.




User Comments: 11

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Archean Archean, TechSpot Paladin, said:

Serves them right I'd say. In fact I think they should be broken up into several smaller organization (perhaps one for each country) to break this stupid 'monopolized' hold of newscorp on (nearly) everything.

Trillionsin Trillionsin said:

How do I my space?

MilwaukeeMike said:

Archean said:

Serves them right I'd say. In fact I think they should be broken up into several smaller organization (perhaps one for each country) to break this stupid 'monopolized' hold of newscorp on (nearly) everything.

who's 'Them'? Newscorp doesn't have feelings. Or are you happy that half the Myspace staff got laid off?

Guest said:

Couldn't have happened to a more deserving guy. To bad Rupert Murdoch's financial empire will survive selling my|_____| at a loss.

Archean Archean, TechSpot Paladin, said:

I was referring to Murdoch & Co. and regarding MySpace workers, Myspace was pretty much doomed anyway, so the loss of jobs is an tragic eventuality.

negroplasty negroplasty said:

Good. Could only have been better if it bankrupted them.

matrix86 matrix86 said:

This made me go back and check up on my old profile...I hadn't been there in almost 2 1/2 years. It's definitely changed a lot...looks even more like crap than it did 2 1/2 years ago, lol.

spydercanopus spydercanopus said:

Could have sworn they lost more than that.

captaincranky captaincranky, TechSpot Addict, said:

who's 'Them'? Newscorp doesn't have feelings. Or are you happy that half the Myspace staff got laid off?
Working for "Myspace" is actually considered having a job?

Hasbean said:

Hey, little people! thanks for the refund...You lot have no idea.....A big money pit like MySpace is like printing money for my other tidy little earners...IRS refunds are fantastic! I can defer tax on shity losses from MySpace and cream it in for the next 20 years, before I bankcrupt it, leaving not a penny in MySpace to pay back the tax deferral. Nice little wease curtosy of Reagan and co.

Yours Humbly

Bob Murdock.

petert said:

It is the cycle of life. MySpace stepped in, brought some interesting ideas, took of then landed miserably. It will probably die sometime in the following 5 years. Facebook will meet the same doom. There is always a newcomer ready to replace an old dying.

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