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Silicon Tragedy: NewsCorp Sells MySpace for Just $35 Million


In 2005 MySpace.com was the world’s fastest-growing social network, with 20 million unique visitors (later climaxing at 70 million) each month in the United States. It was at that time when media goliath News Corporation was able to aquire the budding empire for a smooth $580 million, what most considered then to be a good deal. News has broke this afternoon that NewsCorp will sell the website to advertising targeting firm Specific Media for a mere $35 million, bringing perhaps a conclusion to the mesmerizing rise and fall of MySpace.com.

Before there was Mark, there was Tom. The side-turned smiling entrepreneur and first friend to anyone who ever used the site, who along with Chris DeWolfe launched MySpace is 2003. It was not till 2009 that Facebook finally over took MySpace, but the site had been poked, and in decline for years. New York Times:

"As users fled MySpace, so, too, did advertisers. The market research firm eMarketer estimates that the site will earn about $183 million in worldwide ad revenue this year, down from $605 million at its peak, when the site introduced many Web users and many advertisers to the concept of social networking.

'It’s a shame that MySpace’s value has diminished so severely since the acquisition; MySpace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,' Richard Rosenblatt, the chairman of MySpace at the time of the sale to the News Corporation, said in an e-mail."

MySpace only made a profit for NewsCorp once in six years, pushing management to frantically attempt to reboot itself several times as a social destination for music, politics, comedy, movies and other media. As each year went by, MySpace would bleed out more and more staff. Still NewsCorp came out with a $100 million asking price for the company and pushed that the site maintains 40 million active users worldwide. Buyers laughed in their face, pushing the price down to $35 million, which after bonus and stock comes close to equalling NewsCorp Chairman Rupert Murdoch's yearly pay.

Where did the bubble burst? Some have argued that as variety in the social-media industry grew, users had to make choices of what sites were really worth their time and interest logging into everyday. Others say it may just be the inevitable end for any social-media rocket when dealing with the volatile mix of fast-moving technology, fickle user behavior, and swirling public perception that scrutinizes the industry.

When the end came, internal emotions reflect the feelings of many when they stopped using the site. Not sour or angry, just ready to move on. New York Times:

“Today should be a day,” Sean Percival, a vice president at MySpace, wrote on Twitter on Wednesday morning. Two hours later, he followed up, telling his online followers that Wednesday would be his last day at the company. Seemingly referring to the site’s rise and fall, he wrote, “It was a unique moment in time and an impossible problem to solve. Was proud to be a part of it.”
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