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Myspace “was worth at least $15 billion”, says founder

By | Published on Tuesday 19 November 2013

MySpace

Myspace co-founder Chris DeWolfe has said that News Corp was foolish to sell the website for just $35 million in 2011, when it should have been worth vastly more. He told The Telegraph that the Rupert Murdoch-controlled company’s failings in building the social network began as soon as it bought the firm for $580 million in 2007.

“He made a big blunder in announcing our potential revenues”, said DeWolf. “He went to [Wall] Street and said, ‘Myspace will do $1bn of revenue and $250m in profit’. The same year, Facebook lost $250m on zero in revenue. They were building user experience while we were forced to muck up ours”.

After that, he said, News Corp’s rush to monetise the site kickstarted its demise, while another competitor only grew: “[YouTube] didn’t have any ads at all back then because they wanted to let it run, let it grow. We had the second largest video site in the world after YouTube, but we had ads in front of every single video. Whenever I asked to reduce them, six months of analysis needed to be done on how much revenue we would lose”.

He added: “When we [DeWolfe and co-founder Tom Anderson] left, Myspace traffic was bigger in the US than Facebook’s. This is as recently as 2009. Facebook was worth $20 billion or $30 billion then, Myspace was worth at least $15bn, so shame on you for letting $15 billion go to waste and selling it for $30 million a year and a half later”.

This does all kind of ignore the fact that Myspace was a clunky website that was horrible to use even before News Corp bought it, but maybe he does have a point about the media giant prioritising short-term ad sales over long-term site development. Though you can’t really blame Team Murdoch for not being especially attracted to the web sector’s frequently employed “haemorrhage cash now, hope you’ll make a profit sometime later this century” strategy.

And even if News Corp was to blame for driving Myspace into the ground, it’s hard to see how it could have made much more than $35 million when it offloaded the business. After all, new owner Specific Media’s attempts to relaunch the website seem to have stalled somewhat and, as previously reported, last week the company announced another round of redundancies.



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