Last 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).
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.
- 5 social media networks that are still alive and kicking, but we don’t know why
- Ahead of global rollout, the Snapchat redesign could already be sparking growth
- IRS forces Coinbase to cough up tax data of 13,000 digital coin traders
- Why the internet dooms the sneaker industry as much as it helps it
- Exclusive: How nonprofits use Facebook to drive donations after a disaster