Rupert Murdoch’s News Corporation managed to get rid of its comatose Myspace for $35 million, but the buyer, Specific Media will have a rough time getting its ROI. When they acquired it six years ago, News Corporation paid for it $580 million and managed to destroy its value quite fast. Some blame it on Facebook, others on lack of business intelligence. One thing is clear: Specific Media didn’t necessarily make a smart investment.
It’s puzzling though that News Corporation still retains a minority stake in the business that has been labeled as a drag on growth on so many occasions. When they relaunched Myspace with a new design and a new purpose last November, News Corporation were confident that they were on the right path. This confidence vanished quickly, and things don’t look rosier for Specific Media either, despite the fact that they brought on board Justin Timberlake, who owns a part of the deal.
To be successful Myspace needs to change – the question is how? Specific Media hasn’t disclosed any future plans after signing the deal with News Corporation. But according to the New York Times, Timberlake is still confident in the potential of the site.
And while News Corporation finally got rid of their major headache, the media attempts to learn the tough lessons in social networking derived from the rise and fall of the social network. For us, this is a lesson in public relations. What killed Myspace was a slow response to an imminent threat: Facebook. Like many web giants, Myspace treated competition with the attitude of the sovereign who believes that nothing can go wrong. But on the internet, the general lifespan of a successful business is ten years, if lucky. It took digg less to fall, and FriendFeed is just a distant memory. The question is, who’s next after Myspace. Anyone dares a prognostic?