In 2005 many analysts saw News Corps’ $580 million buyout of social network MySpace as a huge success when the company more than doubled their monthly traffic numberx from 20 million to 70 million users during the first year of acquisition and now just six years later the company has announced the sale of the one-time media darling for $35 million.
The social network was picked up on Wednesday by Specific Media with Specific CEO Tim Vanderhook noting:
“Myspace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online.”
After being purchased by News Corp. the site underwent a major site redesign as they continued to bleed up to 1 million users per month from the company’s highest levels witnessed in December 2008. While new features were added to the network and more emphasis was placed on artists and musicians the company failed to gain the mass appeal they once held.
For their part Specific Media, a digital media company has promised to continue in Myspace’s current direction.
“There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest. We look forward to combining our platforms to drive the next generation of digital innovation.”
With the sale announced it is likely that most if not all of Myspace’s 400 employees will be fired, although Specific Media has not stated what their intentions for the company’s staff is at this time (News Corp emailed employees to let them know that their futures were uncertain and likely void of a job), what is known is that company CEO Mike Jones will be resigning from his position.
Market research firm eMarketer has estimated that the website will bring in $183 million in worldwide ad revenues in 2011, down from the company’s height advertising peak of $605 million annually.
It will be interesting to see how a company that specializes in online media can sculpt the company into something more than it has become. I personally always thought that it was silly for News Corp to jump head first into a market they had almost zero exposure in before the acquisition.
Are you willing to give Myspace another try now that the company is being run by an internet firm? If they don’t attempt to start competing with Facebook again they may still have a chance to become a premium entertainment hub as recently planned.