New Owners Plan to Revitalize MySpace
Having paid $580 million to acquire MySpace in 2005, this week News Corp (NASDAQ: NWS) offloaded the social networking site to Specific Media Inc. for approximately six percent of its original purchase price. Clearly satisfied with their rumored-to-be $35 million purchase, executives at Specific Media, backed by celebrity Justin Timberlake as a shareholder, intend to turn MySpace around and recapture the market share it has lost to other social media sites, most notably Facebook. In the wake of LinkedIn’s recent phenomenal IPO which saw shares leaping by over eighty percent on its first day of trade, the MySpace fall from grace is a reminder that internet users can be fickle, and trends can change sharply and speedily. This is something investors may do well to bear in mind as rumors about that both Facebook and Zynga are considering going public, raising capital through IPOs.
Specific Media was formed in 1999 by three brothers – Tim, Chris and Russell Vanderhook. Specializing in online marketing and advertising, the company is marketed as the leader in the “next phase of the advertising evolution” as it aims to integrate video, display, mobile and IPTV into one platform. It boasts an advertiser base including Fortune 500 companies, and name-brand publisher partners. Based in Irvine, California, there are Specific Media offices across the United States and in Europe.
With Justin Timberlake as part owner of newly purchased MySpace, it is reported that Specific Media anticipate revitalizing the ailing social network platform, turning it into a place where fans can gather and interact with their favorite entertainers and each other, as well as watch videos, listen to music, discover and share new innovations. Timberlake noted that MySpace has the potential to provide this interactive platform. Speaking on behalf of Specific Media, CEO Tim Vanderhook stated that they were looking forward to working with Timberlake, who will “lead the business strategy with his creative ideas and vision”.
News Corp will reportedly be retaining less than five percent stake in MySpace, although specifics of the deal have not yet been revealed.