Remember when everybody had a Myspace account and the upstart Facebook was only for people with a college e-mail address? Back in 2005, Rupert Murdoch’s News Corp. purchased the social media power for $580 million, which seemed like a steal to most. In its heyday, Myspace was the most popular social media network but its popularity has waned since 2009, when rival Facebook became the go-to social network. As of May 2011, Myspace was receiving 19.7 million unique visitors per month and was the 80th ranked site as opposed to Facebook, which was #2 behind Google.
In recent years, the company has undergone several restructurings, laying off workers and cutting its workforce to around 400 workers this month. Specific Media, a group including pop sensation Justin Timberlake, announced yesterday that they were acquiring Myspace for $35 million, well below News Corp.’s original asking price of $100 million and way below what Murdoch’s company paid for the social network in 2005. News Corp. also tried to acquire Facebook around the same time, offering founder Mark Zuckerberg $750 million. Zuckerberg declined, and the site has recently been valued at upwards of $100 billion dollars. Smart move to say the least.
What does Specific Media intend to do with the former music and entertainment website giant? The Wall Street Journal reports that by teaming with Timberlake, they intend to “rebuild and reinvigorate” Myspace by making it “a place to consume media and connect with entertainers,” something that others have tried unsuccessfully to do with Myspace for years. However, having someone like Justin Timberlake affiliated may give them the creditability needed to be successful in such a venture. The partnership plans to reveal their redesign plans for the site in the next couple of months.
So where did Myspace go wrong? Many believe it was the company’s inability to adapt to a changing marketplace. While Facebook has been able to attract users of all ages, Myspace still catered to a younger demographic in its dying stages. Myspace also suffered from many ads on its user’s pages, which caused the site and user pages to load slow. However, it’s amazing to see how far a social media giant can fall in such a short span of time. Myspace had projected losses of $165 million for the fiscal year ending June 30th, which scared off many would-be bidders interested in the company. Should investors be wary when Facebook eventually debuts its IPO sometime early next year?