Is MySpace worth almost nothing?
Posted
Oct 14 2009, 10:12 AM
by
Kim Peterson
Rating:
We know that MySpace has lost momentum to Facebook, but has it lost all its value as well?
That's where the onetime social media darling may be headed, writes Henry Blodget on Silicon Alley Insider. One of Blodget's sources says that MySpace pulled in around $500 million to $600 million in revenue last year, and didn't make a profit.
Blodget factors in those details, plus MySpace's declining market share, and figures the company might be worth 1X to 2X revenue. If so, its valuation could be in the range of $500 million to $1.2 billion, he writes.
Recall that Rupert Murdoch's News Corp. (NWS) bought MySpace for $580 million in 2005.
MySpace has new management on board, and perhaps fresh blood can save what appears to be a sinking ship. But history shows that the Internet can be ruthless to its weak and wounded.
"In the history of the Internet, the instances in which a former
world-beating company has lost its mojo and then come roaring back to
health are RARE," writes Blodget. "Far more common is the fate of companies like Lycos,
Infoseek, and Excite -- once-rich, successful, and powerful properties
that are now all but forgotten."
