Is there a full moon? I just wondered as I am reading in The Times that News Corporation (News Corp) has been discussing selling MySpace to Yahoo! in return for a 25% stake in Yahoo! This would value MySpace at a whopping $12.3 billion (News Corp bought it for $580 million).
Now I can understand News Corp trying to get rid of it: yes it is still popular, but with the growing popularity of Facebook it could also quickly become a Friendster and – as is the risk with all such sites where if the members of the network leave – become an expensive empty site. Now I don’t think MySpace is on its way out anytime soon, but I do think it has peaked and that, outside of being handy for bands to say, check our MySpace site, and the use by younger teens, that older teens are always on the look out for the next ‘cool thing’, it was MySpace, now it’s Facebook.
So, should Yahoo! give away 25% of itself for MySpace? Well, it is a known fact that Yahoo 360 has not really set the world alight and Yahoo would love to get their hands on a valuable social networking property. BUT, if they want to get into this area then Facebook – who turned down a bid from Yahoo! of between $1 and $1.5 billion last year – still seems to offer the best value for money v risk. It would also fit with Yahoo!’s track record for buying best of breed – Del.icio.us, Flickr etc. I just don’t see owner MySpace being a good move for Yahoo! (esp as it is still signed up to use Google until 2009 for ads etc).
If Yahoo! really like the look of MySpace then they should offer much less for it, in terms of cash or a stake, or get more from News Corp to sweeten the deal, otherwise, leave it alone.
Of course the guys at Facebook will now be looking at thinking they were right to hold out and that a figure of nearer $10 billion would be their worth. It isn’t, but since when did that matter. As the old saying goes a thing is always worth what someone is willing to pay for it. And let’s not forget Google. Unless you’re in Brazil where Orkut is a success, they too have failed to set the social networking space alight, so don’t be surprised if they try and snap Facebook up.