Question Technology

Did News Corp (Fox) help or hurt MySpace by purchasing it in 2005?

Fef March 28, 2007 06:44:03

News Corp announced plans to buy MySpace for $580M in July 2005. MySpace had 22 million users and grew at an amazing 2M users per month at that time. In early 2007, MySpace has over 166M users and analysts estimate over $300M in annual revenue.



MySpace faced legal challenges, government regulation and safety concerns -- News Corp stepped up with its vast resources of lawyers, publicity and safety initiatives.



MySpace has a very hip culture -- both of its users and employees. Many fear that the corporate governance by the mature News Corp may have stunted MySpace's opportunities.
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  • +2 raves David April 02, 2007 23:30:01
    David

    Hurt MySpace

    Site should be entertaiment agnostic but has been turned into a marketing shill for Fox crap. If there were ever two brands that don't belong together, its MySpace and Fox (circa 2005). But since they are now homogenized into one, Fox got a little cooler and MySpace got uncool really fast. It certainly helped Facebook if you look at their traffic since the merger.
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  • +1 raves
    Curious E May 07, 2007 14:27:46
    Curious E

    Helped MySpace

    I'm not sure Intermix would have been able to support the kind of growth MySpace was experiencing. Growing from 22m to 166m reg users required lots of bandwidth, human personnel cost, etc. Because of its resource base, NewsCorp was able to easily support this growth. I highly doubt the VCs behind Intermix would have injected enough capital to properly support that ramp.
  • +1 raves
    Owen May 06, 2007 03:09:44
    Owen

    Hurt MySpace

    It should have sold to Viacom. It would have gotten MTV age marketing skills, finesse, content and cash to grow servers. Viacom would have gotten the latest buzz and leg up into online advertizing.
  • NINjaturtle May 04, 2007 21:35:16
    NINjaturtle

    Hurt MySpace

    hurt in cred, but probably not monetarily. but i think people are getting tired.
  • Valerie April 06, 2007 08:15:35 (edited)
    Valerie

    Hurt MySpace

    MySpace got very boring
  • +2 raves
    David April 02, 2007 23:30:01
    David

    Hurt MySpace

    Site should be entertaiment agnostic but has been turned into a marketing shill for Fox crap. If there were ever two brands that don't belong together, its MySpace and Fox (circa 2005). But since they are now homogenized into one, Fox got a little cooler and MySpace got uncool really fast. It certainly helped Facebook if you look at their traffic since the merger.
  • Fef David April 24, 2007 07:16:54
    Fef
    Great analysis. A lot of competition tried to knock off MySpace before the merger. The competition failed to gain ground until recently, nearly 1 year after the merger and Fox had a chance to implement some of its desired changes of the site. Coincidence?
  • +1 raves
    David Fef April 30, 2007 16:30:08
    David
    Look at the return rate on MySpace vs. Facebook, Bebo etc. According to a panel at a conference I was at, MySpace sees 14% of registered users returning to the site each month, Facebook sees 94% and Bebo sees 90%. Facebook and Bebo are doing to MySpace what MySpace did to friendster. I think the age of MySpace might be ending. Amazing how fickle the internet audience can be.
  • +1 raves
    Art March 30, 2007 20:15:37 (edited)
    Art

    Helped MySpace

    Well it made the top players wealthy, it propelled the website to even higher levels of fame and provided almost limitless amounts of capital. I think this helped Myspace, don't you?
  • Al March 29, 2007 20:40:37
    Al

    Had no affect on MySpace

    It was way off and running prior to the Fox purchase but as it is with anything that hits scale its going to be more and more homogenized as it matures and evolves as a property within the News Corp portfolio. Think MTV.
  • OracleBrad March 29, 2007 16:20:34
    OracleBrad

    Hurt MySpace

    MySpace did not have the best technology, The site frequently went down. What it had was "buzz". That kind of street cred that can't be bought by the biggest of corporations. When any independent site with "buzz" is acquired by a company without buzz, the net result is that the site loses some of its credibility.
  • Fef OracleBrad March 29, 2007 22:39:22
    Fef
    Did MySpace lose some of its credibility? Certainly -- you can't please all the people all the time. But MySpace gained a lot of credibility as well with a different demographic. Maybe that helped MySpace more than it hurt??
  • tanga-reen March 28, 2007 18:06:09
    tanga-reen

    Helped MySpace

    MySpace greatly benefited from Rupert's deep pockets, but unfortunately, I don't know if MySpace will last.
  • +2 raves
    Stacy March 28, 2007 16:24:47
    Stacy

    Hurt MySpace

    MySpace looks like a fox marketing machine right now. I think that is putting off many users
  • +2 raves
    Adi March 28, 2007 09:06:13
    Adi

    Helped MySpace

    I suppose that depends on your definition of "hurt". If by hurt you mean their user base felt betrayed and that MySpace sold its soul to The Man and as a result main stream Johnny Public came a long and killed an underground yet burgeoning website...then yes, News Corp killed the Social Networking Star.

    On the other hand, if by "hurt" you mean MySpace lost the opportunity to be a larger company, than I disagree. The publicity alone from the merger was enough to take MySpace out of this stratosphere and essentially put terms like "Social Networking" and "Web 2.0" on the map. News Corp did for MySpace what Colgate, Hoover, and Google did for their respective industries, turned a brand name into a verb. Do you MySpace?
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