Skip to main content

A look inside News Corps’ overly optimistic MySpace sales pitch

myspace for saleLast week, it was reported that MySpace’s days were numbered and the sale process was going to hit full swing soon. Apparently it has, and as could have been assumed, it’s not going to be pretty. TechCrunch claims to have obtained a copy of MySpace’s very confidential pitch plans as penned by News Corp.

As could be expected by any company trying to peddle its struggling Web property, News Corp is being overly optimistic about MySpace’s future. Of course this optimism can only go so far: The most positive things News Corp could say about MySpace is that its annual revenue will be approximately $109 million and its expenses at $247 million. Do the math, and that means the failing social network is operating on a $165 million loss for the year. Unfortunately, that figure is about as good as it gets. News Corp wisely chooses not to touch on much of MySpace’s past numbers, user falloff, or general slump into oblivion. Instead, the document largely seems to conclude that there is hope since the sites revenues are growing (it should be mentioned that so are its expenses, even in the face of massive layoffs this year).

Recommended Videos

So, to the future News Corp ethusiastically points! According to the report, the firm thinks it’s possible for MySpace to stage some sort of comeback of unforeseen proportions, hinging on the forecast of seeing expenses drop to $69 million and revenue to $84. Sure that means revenue would take a dip, but the drastic (incredibly, some might say impossibly drastic) fall in expenses would make MySpace profitable. The pitch goes on to cast revenue expectations for the next few years, saying the site will bring in $101 million in 2013, $119 million in 2014, and $139 million in 2015.

It all sounds like a desperate bout of wishful thinking on News Corp’s part. But you can’t blame the company for doing its utmost to unload the site and, fingers crossed, get some money for it (we have to point out that News Corp acquired MySpace for $580 million in 2005). But here are a few other crucial numbers that you’d think would make most of New Corp’s predictions for MySpace impossible:

  • This year, MySpace lost 10 million users between January and February and is currently losing 14 percent of its users every month. How that will attribute to rising profits between 2013 and 2015, we’re unsure.
  • MySpace’s advertisers are running for the hills. A visitor’s average time on the site has plummeted to 59 percent over the last year.
  • Since 2009, MySpace has had to layoff more than 1,500 international and national employees.
  • Sharing via MySpace decreased 20 percent in 2010. For some perspective, sharing via Facebook increased 394 percent. Sharing via Orkut even jumped 212 percent.

Further complicating any sort of sale is the fact that MySpace is again being sued [Bloomberg] for giving third parties user data. Selling the troubled site is getting more and more difficult for News Corp.

Molly McHugh
Former Social Media/Web Editor
Before coming to Digital Trends, Molly worked as a freelance writer, occasional photographer, and general technical lackey…
Bluesky finally adds a feature many had been waiting for
A blue sky with clouds.

Bluesky has been making a lot of progress in recent months by simplifying the process to sign up while at the same time rolling out a steady stream of new features.

As part of those continuing efforts, the social media app has just announced that users can now send direct messages (DMs).

Read more
Reddit just achieved something for the first time in its 20-year history
The Reddit logo.

Reddit’s on a roll. The social media platform has just turned a profit for the first time in its 20-year history, and now boasts a record 97.2 million daily active users, marking a year-over-year increase of 47%. A few times during the quarter, the figure topped 100 million, which Reddit CEO and co-founder Steve Huffman said in a letter to shareholders had been a “long-standing milestone” for the site.

The company, which went public in March, announced the news in its third-quarter earnings results on Tuesday.

Read more
Worried about the TikTok ban? This is how it might look on your phone
TikTok splash screen on an Android phone.

The US Supreme Court has decided to uphold a law that would see TikTok banned in the country on January 19. Now, the platform has issued an official statement, confirming that it will indeed shut down unless it gets some emergency relief from the outgoing president.

“Unless the Biden Administration immediately provides a definitive statement to satisfy the most critical service providers assuring non-enforcement, unfortunately TikTok will be forced to go dark on January 19,” said the company soon after the court’s verdict.
So, what does going dark mean?
So, far, there is no official statement on what exactly TikTok means by “going dark.” There is a lot of speculation out there on how exactly the app or website will look once TikTok shutters in the US.

Read more