It's Too Late, MySpace

News Corp.'s (NYSE: NWS  ) MySpace is trying to do what Friendster, Tribe.net, Bebo, and any social network that squandered its 15 minutes has failed to do.

In trying to regain relevance, MySpace is hoping that last month's website makeover will bear fruit in the coming weeks.

I guess MySpace missed the memo. You only get one shot to matter in Web 2.0, and its time came and went. News Corp. should have either cashed out of MySpace when it was hot -- or at the very least, peaking. We're living in Facebook's world now, until that site somehow stumbles.

According to Bloomberg, MySpace chief Mike Jones told those in attendance at the LeWeb conference in Paris this week that the company isn't in discussions with potential buyers or merger partners.

Really? Who would buy MySpace? Everyone saw what happened when AOL (NYSE: AOL  ) shelled out $850 million for Bebo. It dumped it this summer for less than $10 million.

Web 2.0 sites are great when they're hot, but it's catching a falling steak knife after that.

The one thing working in MySpace's favor is that the major portals are trying to get some form of social networking mojo going. They have largely stumbled in the past, so even a meandering MySpace -- which can be exploited by a larger company with mega traffic -- is better than an organic flop.

Let's go over some of the potential buyers for MySpace, if it should ever put itself up for sale and be willing to cash out at a fire sale price.

  • Yahoo! (Nasdaq: YHOO  ) : CEO Carol Bartz is under pressure to make something happen, and its market-leading email platform has been called a "dormant social network" in the past. MySpace and rumored acquisition target AOL are destinations that are way past their prime and as sexy as Abe Vigoda in fishnets. However, they're magnetic properties that will come cheap, an unfortunate necessity given Yahoo!'s cash-poor balance sheet relative to its larger rival.
  • Google (Nasdaq: GOOG  ) : The world's leading search engine has the money and the momentum to overcome any negative implications of buying an over-the-hill website. However, one of MySpace's rare strengths over Facebook is its more established promotional platform for musical artists. Big G is eyeing a bigger play in digital music, and this would help in terms for street cred. MySpace is also on firmer footing than Google's own Orkut.
  • Microsoft (Nasdaq: MSFT  ) : MySpace's grip on youth, as Facebook embraces the generational gaps, makes it a compelling acquisition target for the Xbox 360 company. Social gaming is just a matter of connecting the dots.

You don't have to be a portal to pine for MySpace at the right price. Viacom (NYSE: VIA  ) was the company that came up short in the original bidding war for MySpace five years ago. The MTV parent can have the last laugh. Given the sorry state of the prerecorded music industry these days, Warner Music Group (NYSE: WMG  ) can use the injection of a dot-com hotbed, even if its balance sheet is unlikely to give it the wiggle room to buy MySpace and see it through to a profitable monetization.

I can see why News Corp. wants to give MySpace a few weeks to see if the recent redesign will deliver either the traffic rebirth or the profitability that has proven elusive. However, if that fails, MySpace may be on the road to becoming the next Bebo if News Corp. can't unload it quickly.

Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. The Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz wonders what took social networking so long to embrace local search offerings like classifieds? He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it knows all.


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  • Report this Comment On December 09, 2010, at 1:30 PM, gfbjohn wrote:

    What MySpace had going for it, and still does, is it avails a great (relatively) static venue for bands to present themselves. MySpace as a social hangout is soooo 2000-late.

    I have a page there. Haven't updated or even logged in in months. Why? Because I don't get leverage from it.

    What Faux News needs to do is capitalize on bands being willing to upload content. Make it exciting and a way to sell the dream.

    People in bands want their music heard. If it's good it should be heard:

    Jury the content, both user and industry A&R.

    The bands w/ great content? Start a MySpace Music Awards and get it on national or at least cable. Put them on a new Pandora-like web streaming. Get SIRI Sirius XM to add a Best Of MySpace channel. Facilitate linking the static MySpace content to the successful social (FaceBook, LinkedIn, MeetUp) network(s). Find ways to vitalize local music. Help bands connect with local venues on one hand and with potential local people who might go out to see live music done well on the other hand.

    The parents of now grown children used to go see bands before the kids became home-binding anchors and are of the age they now might be ready to start coming out of their cocoons. Help them to realize that in many states there's a smoking ban now and it's finally safe to go to clubs and not come out smelling like a putrid ashtray.

    MySpace has to realize it still has a significant niche and can capitalize on it, but better do so quickly. There are other sites, e.g. ReverbNation and BandMix, that get it and are working to empower musicians and bands.

  • Report this Comment On December 10, 2010, at 2:51 PM, zornwil wrote:

    To echo the immediately-preceding comment (at least what I see as this is posted, the longer comment re the music presence on MySpace), it really is sad to see that there is actually a committed and active audience that has remained - doggedly - on MySpace yet is being largely ignored as MySpace's owners seem to be aiming past/beyond what they already could activate. In fact I've seen musicians continuing to join MySpace even in the past months. It seems obvious that MySpace continues to fill a void, a white space not well served by the bigger players in this social media space. The longer that management refuses to acknowledge that they ought to work on this strength while not attempting to go for a non-existent opportunity to be the same as Facebook the longer MySpace's only strength will wane and then indeed the site will become irredeemable. From my perspective a classic case of blind ambitions mixed with short-sightedness.

  • Report this Comment On December 10, 2010, at 2:52 PM, zornwil wrote:

    Brief PS - I myself have no stake in MySpace, I don't even have a site on there although due to continuing momentum among the circle of musicians I know I am likely to set something up there shortly as in fact in my own "social graph" I'm becoming "forced" to.

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