Murdoch's price-dropping of a potential valuation for MySpace is intriguing, because it implies that News Corp. might be willing to unload the site if the price is right. Given the headaches involved with, say, trying to sell copyrighted music and crack down on its user base, who quite often use illegal means to obtain songs to play on their MySpace pages, it might be a smart move. Heck, the site even gave away a band's MySpace page to a Fox TV show, before an outcry made the company give it back to the band. After all, the younger user base is largely fickle, with sites like Friendster.com and Xanga.com left in its wake.
Advertisers can be fickle as well, and with Facebook.com looking for a billion-dollar-plus valuation, an acquirer needs to have a compelling value proposition for advertisers to justify those types of numbers. Facebook and MySpace, for all their gaudy traffic numbers, are having a difficult time developing a strong advertising base, due in part to fear of user backlash, and in part to the lack of tools to pull data advertisers want from the collective user profiles. Indeed, with some teens moving over to Facebook due to privacy concerns, perhaps Microsoft
Still, perhaps with a more web-savvy partner like Yahoo!
More virtual zaniness:
Fool contributor Stephen Ellis does not own shares in any companies mentioned. You can view the stocks he owns and check out his 98th-percentile ranking in Motley Fool CAPS, the Fool's new stock-rating community. The Motley Fool has a disclosure policy.
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