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MySpace sold for $580 million



3:55 pm on Jul 19, 2005 (gmt 0)

MySpace a networking website was sold to News Corp for $580 million dollars.


How on earth could it be valued so high?


4:06 pm on Jul 19, 2005 (gmt 0)

WebmasterWorld Senior Member whoisgregg is a WebmasterWorld Top Contributor of All Time 10+ Year Member

Last time I checked Alexa puts it at the 13th most visited site on the internet? That's a lot of eyeballs...


4:07 pm on Jul 19, 2005 (gmt 0)

I know but untargeted and the audience on there isn't exactly what I would call "premium".


4:22 pm on Jul 19, 2005 (gmt 0)

>> untargeted and the audience

they all use or buy certain things like toothpaste, cereal, watch TV, etc. etc. etc.


4:26 pm on Jul 19, 2005 (gmt 0)

10+ Year Member

I don't understand why anyone would buy advertising on that site, except maybe dating sites or cell phones/other networking tools and possibly universities offering communication degrees.

::looks at the mass communication degree hanging on his wall::

*Some* people are interested in studying these people...

I speculate that this kind of site is popular because every marketer hopes to create the next big viral hit, and what better place to start than a giant social pitri dish? On the other hand, I tried using the site, but it was so ugly with all those ads that I hopped over to blogger so I could write in peace.


4:27 pm on Jul 19, 2005 (gmt 0)

But essentially myspace is a hybrid of a forum. As a forum operator, I know the people are there to talk not look at ad's.

Am I missing something?
Would you pay that much for the site?
Have you run a forum or a site like that and made money?


4:39 pm on Jul 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

One of the news releases said they served 8% of "internet advertising" last month.


4:55 pm on Jul 19, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

This is not just a site with a lot of traffic, it is a social network. It has forums, blogs, email, classifieds etc. etc. and has a huge membership base.

These people log in and use this site very frequently, it's quite a web property.


6:09 pm on Jul 19, 2005 (gmt 0)

10+ Year Member

Ah, the allocation of capital.

Common theme whenever anything is acquired: "How can x be worth y?", "They have paid too much!"

The value has been proved time and time again by what people are prepared to pay: From Ask Jeeves to BlogLines to Kelkoo and now this.

We're at the beginning of an industry still. I see kids *everywhere* logging onto their MySpace accounts. In 10-20 years time we may look back at these transactions and be staggered at how cheap they are.



6:15 pm on Jul 19, 2005 (gmt 0)

>> I see kids *everywhere* logging onto their MySpace accounts.

I remember when everyone logged into Friendster

Just because your on top of a pile of [snip] doesn't mean you don't stink

[edited by: Drastic at 6:18 pm (utc) on July 19, 2005]
[edit reason] watch the language please - swear filter is there for a reason [/edit]


7:02 pm on Jul 19, 2005 (gmt 0)

10+ Year Member

My space is one of 30 companies owned by Intermix Media. It's misleading to say myspace is worth $580 million.


7:05 pm on Jul 19, 2005 (gmt 0)

Good observation.
Thanks for pointing out my lack of due diligence :(


7:13 pm on Jul 19, 2005 (gmt 0)

WebmasterWorld Senior Member whoisgregg is a WebmasterWorld Top Contributor of All Time 10+ Year Member

I would suggest that the other 29 are *not* of equal value (combined) to MySpace, imho.


7:40 pm on Jul 19, 2005 (gmt 0)

10+ Year Member

I'd never heard of myspace until about 3 weeks ago, but apparently it's been the coolest place in town for a while now. I thought Xanga was #1, but I've been told they serve a younger audience.

A quick gander at a couple peoples' pages and I found the banner advertising very obscene. Half the pages won't even fit on my 800x600.

I asked a nephew of mine if he realized that when he added a "what I'm listening to now" cd to his blog that Xanga was getting a commission every time somebody purchased it, he had no clue. I may be wrong, but I've got the impression that a large majority of the people using these things have no idea that they're feeding a business when they use them.

That's probably why they're worth so much -- what's better than a bunch of people you can sort of subliminally advertise to, and who will create the ads and sell the stuff to their friends? And a few million CPM impressions a day never hurt either.


7:45 pm on Jul 19, 2005 (gmt 0)

10+ Year Member

My space is one of 30 companies owned by Intermix Media. It's misleading to say myspace is worth $580 million.

MySpace adds up to a majority of it but is one out of several.

MySpace is the demographics that all advertisers want..Murdock is smart to have bought MySpace but I wished Google would have zapped it up! Why was Google asleep at the wheel on this one?


7:48 pm on Jul 19, 2005 (gmt 0)

"I don't understand why anyone would buy advertising on that site..."

We are an indie record label. Our number one referer, by far, is MySpace. The amount of traffic we get from them is insane. We have a "band profile" on MySpace, where we have a music player for our MP3s that have had thousands of plays. We have over 13,000 "friends" that we can market to via bulletins, groups, blogs, etc... These are people that have sought us out and requested that we add them. They want to hear from us.

Needless to say, we purchase advertising on the site. It's really, really cheap.


12:09 am on Jul 20, 2005 (gmt 0)

10+ Year Member

For anyone who is confused why MySpace is such a big deal... It's EXTREMELY popular with the college-age, psuedo-subculture, music loving, tatoo loving, bar-scene loving, and most pointedly non-tech-saavy crowd. And that's just from people that I know who are on it. I get the impression that there are other college-age social scenes who use it just as much.

And they're addicted to it like crack. I know people who go on there 2 or 3 times a day to look for new friends (your friend count is publicly shown BTW) and "be seen" in the MySpace community.

More recently I've had the impression that MySpace has exploded with the high-school crowd as well.

Not only are A LOT of people going there daily, but I don't get the impression that the less myspace users are as opposed to obtrusive advertising as someone on a typical geek site or other tech-saavy forum. (i.e. too dumb not to click on ads ;) )

It also has the power of a wiki. All the content is created by users, so the more time you spend there not only pays off for you, but it grows the whole site at the same time.

It is also used a lot by lesser known bands and musicians as a way to get their name out, and from what I can tell seems to be working out pretty well for them, I have a few friends who have a nightclub weekly, and they use it to remind people to come to their club every week.

So yeah, I can totally see it being valued that high.

I signed on to my MySpace account to see if any thing had changed on the site, and it was only giving errors. Could you imagine paying $580 million for something only to have it break the next day? (Seems to be working again now)


12:41 am on Jul 20, 2005 (gmt 0)

10+ Year Member

Myspace is number 1 source for independent bands. I recently read that around 100.000 bands created their band website on Myspace. Some of them became pretty big (thanks to Myspace).


1:31 am on Jul 20, 2005 (gmt 0)

Its still nothing more than a networking slash forum site. Many of which have failed or are in the process of failing, so whats the business case for MySpace and do the numbers add up.

Are we going back to the ninties where it was all about eyeballs? Unqualified eyeballs back then didn't work and they still won't now. How would one sell something more general on there. For instance how would you sell widgets on there? Or cars? Or anything of signifigence.

Now the poster who talked about his band had a great story to tell. That is simply a branding excercise though and a larger more general advertising push would be harder to do something like that. Further more he pointed out it was cheap, I can vouch for that it is not cheap to run a forum. It costs time and server power.

Many of us have had forum experience and the problems associated with monetizing them. You can't sell widgets on a general purpose forum, so how could you do it on a general purpose networking site?

Someone please tell me how in the long run this is any different than a forum. How its different than Friendster or Xanga.

Article on Friendsters troubles: [usatoday.com...]

I am searching for a WSJ article I read on it a few weeks ago as well. I'll post it when I find it.


5:49 am on Jul 20, 2005 (gmt 0)

10+ Year Member

It's a strategic acquistion -- looking at the financial merits alone is a dubious way of assessing the transaction. However, once you consider who the buyer is, and who the audience is, it should click.


10:12 am on Jul 20, 2005 (gmt 0)

10+ Year Member

Hey vabtz, it didn't take long for me to run into you over here ;) ... Oh, I just noticed that you're the OP, too.

You asked what made it different from the networking sites that have failed or are failing, I think the answer is that MySpace is not failing. It could even be argued that MySpace is the reason that sites like Friendster don't do as well anymore. I remember when MySpace first became popular, and everyone that was using Friendster reluctantly switched. Not because MySpace was "the new thing" but just because the profile pages were more functional and able to be better customized. I think if something better than MySpace popped up that was more functional but still user friendly, then they would switch again, but other than that, it's not just going to die off because other networking sites did. People that use MySpace a lot REALLY LOVE IT and are going to keep using it religiously until they have a good reason not to.

As far as how you can sell something on there, and users being unqualified, keep in mind that most users happily give up a wealth of information about themselves, including age, sex, income, education, profession, taste in music and movies, and interests. I don't know how you could find an audience that would be easier to not only target, but also chop up into very tiny market segments. If that is tapped (if it's not it will be soon) it's going to be a marketer/advertiser's dream!


10:16 am on Jul 20, 2005 (gmt 0)

10+ Year Member

The potential of a site like MySpace is huge. Just imagine the money they must rake in from CPM advertising alone. They probably get a quarter of a million unique hits a day at least. Now if each of those users browses 30 or 40 different pages you are talking about millions of page adverts displayed daily.

The other thing about a site like MySpace is that there is a big market for them. People love to chat online and make new friends. Most people I know who use MySpace have no problem using 2 or 3 other similar sites too, faceparty, chunite, friendster etc. All that advertising alone could generate millions a year. If a subscription service (like they use at faceparty and chunite) is added to that too then you really could be talking about making an extreme about of money.

So when you consider MySpace are already the market leaders and have an audience of millions, it's not surprising it sold for so much.


3:18 pm on Jul 20, 2005 (gmt 0)

10+ Year Member

never heard of my space before. i visited just now, and it looks terrible! i guess millions of eyes = millions od dollars


3:57 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Hey stef25,

Ha - I know! I just found out about myspace a few months ago and took a look and was horrified by how amatuerish the site looked. I was even more horrified when I started asking around and found out almost every person under the age of 30 has a profile and actively uses the site. Craziness. I guess I'm old cuz the stuff that is hip with the kids just doesn't make sense to me anymore. ;-) haha.


8:06 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

4.5 billion pageviews a month.
Intermix excerised a option this week to buy the remaining 47% of myspace for $69 million.


9:49 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

110,000 signups per day

Males: 8,641,000
Males 12-17: 1,764,000 - 22% Reach
Males 18-24: 1,745,000 - 16% Reach
Males 25-54: 3,970,000 - 9% Reach

Females: 9,062,000
Females 12-17: 2,452,000 - 31% Reach
Females 18-24: 1,846,000 - 18% Reach
Females 25-54: 3,860,000 - 8% Reach


9:57 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

myspace IS 100% targeted. You can do targeted advertising based on tons of things. You can target by the groups they are interested in. You can target visitors to people's "myspace" by the theme of THAT space, you can target by age, gender, race, hobbies, whatever you want to target.

People on there provide all of that info in their profiles, groups they join, etc.

If you ask me, I'd say it's worth every penny.


11:04 pm on Jul 20, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Yeah - targeted adevertising is huge. I'm guessing that's one of the reasons the original ad banner movement flopped (not targeted) and why PPC was so successful. Sites like this solve that problem and can likely justify a good CPM rate, moving forward. Dare I predict this ushers in a new era of ad banner advertising, as people start to realize this? :)


1:07 pm on Jul 22, 2005 (gmt 0)

10+ Year Member

Social Networks will help shape the future of our media landscape. That's why sites like MySpace are so important.

I agree that the acquisition is worth every penny. A encourage each person to view anyone's profile and view the information about themselves on their homepage. Notice that each type of information is labeled and divided into neat little database cells. "Movies, Music, Books, etc"

A total marketing dream. If anything else, all that DATA is worth 580million.

Many of you have probably seen this flash animation regarding google [albinoblacksheep.com] and a proposed view of the future with them. If what they say is true - anyone who wants any part in it needs a base like MySpace.

Of course, the poster who said that the only reason people would flock from MySpace to another is if the other were more functional, easier, and more relevant. Yet another poster asked why Google was asleep on this one. If my hunch is right they are probably not even worried about the acquisition and developing a friend network unlike any we have ever seen.

Is it me or does google seem amazingly benevolant? They really took that old addage, "Information is power" to the next level. Does anyone know any trash about em that should marr my perception? Because I am seriously in love with them.



7:47 am on Jul 23, 2005 (gmt 0)

10+ Year Member

I think Google owns Orkut. I believe it's based on the same principles, but as I never was cool enough to be "invited" to any of their cool people only things, I wouldn't know.

Anybody have any idea what's up with Orkut? Is it big, is it growing, at what pace? Does it include a lot of the features found in MySpace, Friendster, etc?

I don't see how it can compete with MySpace with the method of growing they have, but I also think that the way they're doing it will make the service more useful for people who actually know each other.. whereas MySpace appears to be more of a voyeur site than an actual social network.

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