Social networking site, MySpace, irrelevant, old-fashioned and bleeding what's left of its once huge user base like a haemophiliac woolly mammoth after a particularly bad accident with a scythe, has been up for sale for some time but there's only one bidder and he won't pay Rupert Murdoch's asking price, as Martyn Warwick reports.
Once a shining star in the social networking firmament MySpace is rapidly collapsing into a financial black hole. NewsCorp paid US$580 million for the site back in 2005 when it was already past its apogee and the takeover by corporate suits, who had absolutely no idea about social networking or its young aficionados, did nothing to maintain, never mind bolster, its credibility.
The purchase of the over-valued asset was done in a panicky rush and was ill-conceived from the start. Although MySpace did attract extra subscribers for a short while after Murdoch bought it, they soon began to fall away in ever-increasing numbers and despite the company's increasingly desperate measures to staunch the flow, the haemorrhage continues to this day.
MySpace users found that loading pages took longer and longer whilst most profiles quickly took on the trashy tabloid tinge. Add to that a deluge of spam and it's hardly surprising that users defected to the shiny new site and clean interface that was Facebook.
In response, MySpace cut more than half its workforce and then sought to recreate itself as a 'music and celebs' site but with no success and the site is slated to lose $115 million over the course of 2011.
And even though the once fresh-faced Facebook is now beginning to look distinctly raddled it nonetheless does have 700 million users compared to the 50 million or so (and declining) who continue, presumably for reasons of inertia, to use MySpace.
So, the site is lying there on the slab like a cloudy-eyed piece of week-old cod. NewsCorp wants to sell it for $100 million whilst retaining a 20 per cent stake but no prospective buyer is prepared to submit to such a condition and shell out that much for a dubious asset.
Rumour has it that companies from Criterion Capital Partners through to Zynga have passed on a chance to buy, leaving only a personal bid from Bobby Kotick, the president of California-headquartered interactive entertainment software publisher Activision Blizzard, left on the table. And he could walk at any time.
In that event, Mr. Murdoch will either have to reduce the sale price or swallow the loss and try to look big.
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