How Much Did MySpace Cost?

Many of my favorite blogs always note that NewsCorp bought MySpace for $580M. Given MySpace’s 27 million users (at that time), bloggers calculate 1 user=$21. This metric is used to justify other websites’ valuations.

But it’s not true!

I was a shareholder, and the fact is NewsCorp bought InterMix for $580M. InterMix had many highly profitable divisions, from gift card sites to office supplies, and had a public marketcap of $300M long before they ever created MySpace. Accounting for the goodwill on NewsCorp’s balance sheet, one can estimate NewsCorp really paid about $200M for MySpace. That translates to about $7.40 per MySpace user. You have to hand it to Rupert Murdoch, he got the deal of the century.

$7 is a bit less than $21

The point is, bloggers cannot use the $21/user metric to calculate the value of websites. $7 is much more accurate math on the MySpace deal. All of my favorite Web 2.0 blogs seem to make this valuation error. See examples at: GigaOm, VentureBeat, TechCrunch, and ReadWriteWeb. If enough people repeat this false $21/user statistic, perhaps companies will really begin paying this much for websites. And we wonder how bubbles start!

Digg!

Advertisements

28 Responses to How Much Did MySpace Cost?

  1. […] How Much Did MySpace Cost? took me six minutes to write and was viewed by thousands of visitors. Meanwhile, Top 50 Web 2.0 Blogs took an entire week to compile and was read by almost no one! […]

  2. […] spyware. Intermix developed a little social media company called MySpace and was snapped up by News Corp for $580 Million. So you never really know what to expect from an internet marketing […]

  3. Finally a Site that pays YOU

    Finally a Site that pays YOU,Make Money Online

  4. Wow this post help me learn more about finances, and changed my mind towards making money, investing, etc. Thank you man.

  5. blogiskewl says:

    Hi, I recently started a bloghosting platform (based on wordpress MU) and when I stumbled your blog I paid attention to your theme (looking good) so I was wondering can you tell me is it custom made theme or one of those free ones? thanks in advance! regards, blogiskewl

  6. High Protein says:

    I do not know if it’s just me or if everybody else encountering problems with your site. It looks like some of the written text in your posts are running off the screen. Can somebody else please comment and let me know if this is happening to them as well? This could be a problem with my web browser because I’ve had this happen previously.
    Thank you

  7. Thanks on your marvelous posting! I really enjoyed reading it, you will be
    a great author. I will make certain to bookmark your blog and will
    eventually come back from now on. I want to encourage you
    continue your great work, have a nice holiday weekend!

  8. Aline says:

    Hey there! I just wanted to ask if you ever have any trouble with hackers? My last blog (wordpress) was hacked and I ended up losing a few months of hard work due to no data backup. Do you have any methods to stop hackers?

    Here is my web page … dentists in salem – http://www.salemdentalcenter.com/dental-hygienist

  9. Helaine says:

    Howdy this is kind of of off topic but I was wondering if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding knowledge so I wanted to get guidance from someone with experience. Any help would be greatly appreciated!

    Feel free to surf to my site web site ( Helaine – http://ge.tt/9yD7yQr1/v/0 )

  10. Mose says:

    I’m gone to tell my little brother, that he should also visit this weblog on regular basis to obtain updated from most recent news.

    Here is my blog post – homepage ( Mose – http://lateghoul3900.soup.io/post/450691727/The-Law-of-Attraction-Along-With-Physics )

  11. Max says:

    What’s up, this weekend is fastidious in favor of me, as this occasion i am reading this wonderful educational paragraph here at my home.

    my blog – homepage; Max – http://wasixuba.wordpress.com/2014/08/15/jobs-and-law-know-more-by-silas-reed/ ,

  12. Bridgett says:

    I do believe all the ideas you have introduced to your post. They are very convincing and will certainly work. Nonetheless, the posts are too brief for newbies. Could you please lengthen them a little from subsequent time? Thanks for the post.

    Feel free to visit my weblog … homepage, Bridgett – https://myspace.com/habitualstyle4876/post/activity_profile_8235594_2ed2a9618b674df5861aef62e37cd979/ ,

  13. Tamela says:

    Can I simply say what a relief to discover someone that really knows what they’re discussing on the web. You certainly understand how to bring a problem to light and make it important. A lot more people should look at this and understand this side of your story. I can’t believe you are not more popular because you surely have the gift.

    My blog web site ( Tamela – https://heello.com/moldyidea2905 )

  14. Eulalia says:

    Hey I am so glad I found your weblog, I really found you
    by accident, while I was searching on Askjeeve for something else, Anyhow I am
    here now and would just like to say many thanks for a fantastic
    post and a all round thrilling blog (I also love the theme/design), I don’t have time to browse it all at
    the moment but I have bookmarked it and also added in your RSS feeds, so when I have time I will be back to read a lot more, Please do
    keep up the fantastic job.

  15. Shellie says:

    This paragraph is really a pleasant one it helps new net people,
    who are wishing for blogging.

  16. Lindsay says:

    What i do not realize is in fact how you are no longer really
    a lot more neatly-appreciated than you might be
    now. You’re very intelligent. You understand therefore significantly in terms of this matter, made me individually believe it
    from so many various angles. Its like men and women aren’t involved until it’s something to do with
    Girl gaga! Your individual stuffs great. Always maintain it up!

  17. Leatha says:

    Hi! I just wanted to ask if you ever have any problems with
    hackers? My last blog (wordpress) was hacked and I ended up losing many months of hard work
    due to no data backup. Do you have any solutions to prevent hackers?

  18. Erin says:

    I really like your blog.. very nice colors &
    theme. Did you create this website yourself or did you hire someone to do
    it for you? Plz answer back as I’m looking to design my own blog and would like
    to know where u got this from. thanks

  19. Klaudia says:

    whoah this blog is wonderful i love reading your articles.

    Keep up the great work! You understand, lots of persons are hunting round
    for this info, you can aid them greatly.

  20. Judson says:

    Truly no matter if someone doesn’t understand then its up
    to other people that they will help, so here it happens.

  21. Janna says:

    I was recommended this web site by way of my cousin. I
    am now not positive whether or not this submit is written by way of him as no one else understand
    such precise about my difficulty. You’re amazing! Thanks!

  22. Leona says:

    Hurrah, that’s what I was exploring for, what a material!
    existing here at this website, thanks admin of this website.

  23. Natasha says:

    Good replies in return of this issue with genuine arguments
    and telling the whole thing about that.

  24. Bianca says:

    I got this web page from my friend who shared with me about this website and at the moment this time I am visiting this web page
    and reading very informative articles at this time.

  25. Fae says:

    Howdy! I could have sworn I’ve visited this blog before but after going through a few
    of the posts I realized it’s new to me. Nonetheless,
    I’m certainly delighted I came across it and I’ll be bookmarking it and checking back often!

  26. I’ve been surfing on-line more than 3 hours these days, but I by
    no means discovered any attention-grabbing article like yours.
    It is pretty price sufficient for me. In my opinion,
    if all website owners and bloggers made just right content material as you did,
    the web will likely be a lot more useful than ever before.

  27. I like the helpful info you provide to your articles.
    I will bookmark your weblog and test again here frequently.
    I’m rather certain I will be informed many new stuff right
    here! Best of luck for the next!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: