If MySpace is for sale, who would buy it?

Ailing social network might sell for cheap after recent layoffs

MySpace was once a social networking pioneer and shining star, but analysts now wonder who would want to buy the struggling site.

And if anyone buys it, what can they do with it? There are lots of questions surrounding the fate of MySpace since News Corp., which owns the social network, announced last Tuesday a major restructuring effort that included the loss of 500 jobs worldwide, or about 47 per cent of the work force.

Shortly after the layoffs were announced, Rosabel Tao, a spokeswoman for MySpace, told the Bloomberg news service that News Corp. is considering its options, which include selling the site, a merger or a spinoff project. News Corp. acquired MySpace for US$580 million in 2005.

"Obviously, News Corp. is evaluating all three options, so only time will tell," said Brad Shimmin, principal analyst with Current Analysis. "My expectation, however, is that MySpace will be spun off into what the News Corp -- or a potential new owner -- hopes is an adjacent and as-yet unrealized market, something that does not compete directly with Facebook ."

Taking it out of direct competition with Facebook would be a good idea, Shimmin added. Facebook has become the dominant social network in the world, with more than half a billion users and the rapt attention of the mainstream media .

Not long ago, MySpace was the top social network, attracting tweens, teens and college students. Then Facebook took hold and MySpace started to slip into a distant second-place status.

Part way through 2009, Facebook officially eclipsed MySpace , drawing more unique visitors in the U.S. and worldwide.

Then in November, MySpace appeared to concede defeat when the site unveiled what it called a "mashup" with Facebook . The mashup basically is a connection across the two sites that enables users to port their likes and interests from their Facebook profiles and have that information populate the content on their MySpace pages.

"This serves as a reminder that we are very fickle and will move easily to what next is trendy," said Rob Enderle, an analyst with the Enderle Group. "It's something I'm sure keeps Facebook executives up and sweating at night."

He also noted that MySpace simply may be too damaged a site to sell at a decent price.

"It seems to be a huge waste to just shut it down, though that is the path they appear to be on," said Enderle, who noted that Google may be an interested buyer since rumors have been flying that the company is trying to build a social network of its own. "Still Google doesn't like damaged properties so they likely wouldn't pay that much for it either," Enderle said.

He added that Facebook might be interested in a MySpace fire sale, if only to move users over to the Facebook network.

But Shimmin said he doubts that Facebook would care about MySpace's remaining user base, or its partners and technology. Instead, Facebook CEO Mark Zuckerberg might want to buy MySpace simply to shut it down, so someone else won't buy it and build it back up.

"The consumer social networking market is highly volatile with a notoriously fickle customer base," Shimmin said. "Any opportunity to remove a possible future threat should be considered."

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Tags IT industryinternetFacebooke-commerceWeb 2.0 and Web AppsNews Corp.

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Sharon Gaudin

Computerworld (US)
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