News Corporation is a mightily impressive empire, which has done remarkably well in the world of newspapers, television and the movies. When it comes to direct ownership of sports it has a great deal less experience, and it is rather more alien a planet as the corporation will have to deal with entities that it does not own. This involves a slightly different skill set and while Bernie Ecclestone long ago worked out how to herd F1 teams to do what he wanted then to do: using a combination of dividing and conquering and carrots and sticks; News Corporation might find the whole process rather more difficult. Today there is news of News Corporation offloading one of its less successful ventures into alien territory. It has sold the Myspace social media website for $35 million. Not bad, you might think, until you realise that it was acquired for $580 million back in 2005. The website has been sold to the advertising company Specific Media and singer Justin Timberlake. At the time Myspace was the big new thing but in the years under News Corporation ownership Myspace has been routed by Facebook, Linkedin, Twitter and so on. At its peak in 2008, Myspace was attracting nearly 80 million people but today that has fallen back to 40 million, while Facebook has accelerated ahead to have more than 600 million users. The good thing about F1 is that it is currently rooted in the TV business, which News Corporation knows well, although the gradual merger between TV and the Internet means that the structures of today will not last forever.
Joe
Facebook is at 750 Million I think these was the last figures I read (If was definately over 500 million a year ago, doing a quick search now) and effectively the 3rd biggest country in the world… if it has boarders.
MySpace… whats My Space??
Hi Joe,
Facebook now has close to 700 million active users.
Online is probably more unstable than sport, as the game is fundementaly changed every 5 years.
95′ we had yahoo, 2000′ we had Google, 2005′ saw the rise of facebook and most recently 2010 the reemergence of apple.
Although the NRL in Australia is as good an example, its half owned by News corp, and is struggling to compete with Aussie rules which is increasingly encroaching into its biggest markets.
Joe
News Corp owns Rugby League in England and half of Rugby League in Australia. The Super League breakaway in Australia was like Kerry Packer’s World Series Cricket.
Ahh, social media trends, they come they go.
Facebook lost over 6 million users in the US and over 100,000 in the UK, it’s still by far the biggest, but it’s a sign that it’s the beginning of the end.
Something like 70% of Tweets on Twitter are totally ignored too.
A bit like 70% of programmes on Sky
Karen,
Yes, it is always best to ignore anything new in the hope that it will go away… That has always been the F1 policy, hasn’t it?
I believe FOX, property of Newscorp also owned the Los Angeles Dodgers (MLB Baseball); however, F1 is a completely different world!
@Joe
But then there will be another ‘new’ thing just around the corner … I believe WEVU is the latest social media network.
Wevu and a bunch of others. I get targeted by about one new network each week.
Ha ha, now thats how to make yourself a media mogul, buy something for $580000000 and sell it for $35000000! I assume old man Rupert wasn’t personally involved in the deal, rather the errant children thought that losing the odd half a billion Dollars wouldn’t dent the pot too much.
Schadenfreude is an ignoble thing, but is hard to resist when the Murdochs are involved.
Just noticed that Newscorp paid $7.25c per unique user when they bought Myspace, that sounds like a hell of a lot, surely they didn’t think they would generate enough revenue to make a profit? I bet Bernie is rubbing his hands with glee at the thought of parting these bozos with a few hundred million.
The fundamental problem with MySpace being owned by News Corp was that News Corp were very unsubtle in taking every opportunity to commercialize MySpace and ram unwanted offers down people’s throats and try to wring every last cent from their visitors/users.
They also thought they could leave MySpace and it would just run and run, rather than actively monitoring it and improving it based on user feedback. The classic “cash cow” approach thinking they were sitting on a gold mine that just makes money with no input required.
Result. They users/visitors left and went somewhere else where they don’t get hassled like this.
The only time I ever visit MySpace is when a band I’m interested in says they use MySpace rather than have their own website. Apart from that there is nothing there. Lets hope the new owners can do something better with it.
$545 million loss by being greedy. They could have and should have played a much more subtle long game and chased the visitors/customers, not the money.
Just think what it will be like if News Corp get hold of F1.
Social media trends are now affected by what I would call the social attention deficit cycle. This means that the lifetime of a “Media based product” is getting shorter. Or to put it in marketing terms the bathtub is getting suited to shorter people. (re the bath tub product lifecycle curve)
This is in sympathy with the generation that wants everything now, with no effort involved. A sad effect of the Blair era. (one of the many)
The other interesting piece is that NewsCorp is set to take over BSkyB – perhaps it’s using a little bit of the cash it got from selling MySpace… It would be a terrible shame if F1 headed back down a pay-TV route…
Emperors new clothes, how much will Linkedin be worth in 10 years I wonder?
Who knows? I think LInkedin is very useful, but I am not sure how the financial model works.
@twiger, karen & Joe
the big thing in IT is certainly Google. They’re much more dangerous than Microsoft & their latest project google+ the facebook killer has some tricks up its sleeve.
It’s hard to beat facebbok but google+ has really solid & creative solutions & the #1 social network has to react quickly. If I had shares in facebook, I would start selling right now.
The big question is TV future. As Joe pointed out in many occasions young adults leave TV for internet & TV itself is being steadily merging with internet.
What will be the future of TV in general & sport broadcasting in particular. Impossible to answer, but my guess is that Internet Giants will be soon in a position to overcome media groups, as soon as Internet reliability takes a decisive step (Joe knows what I’m talking about. He’s using Free). They’ve got the huge advantage of flexibility & mainly of targeted publicity.
The problem with those internet giants is that they’re strangers to journalism. And journalism is the basis to cover sports, politics or whatever. In that respect a look at Yahoo quickly convinces every skeptic.
I hope that by the day we’ll have to watch F1 on youtube, we’ll have a decent commentary team. It might come sooner than we think.
Into all this, where does NewsCorp fit ???
P.S : to show how bureaucratic authorities are completely blind to fast web change, In France the CSA (Authority which controls medias) decided to forbid TV & Radio shows from mentioning their fb or twitter pages because they consider it illegal publicity. The decision was met with a unanimous reject. Maybe they backtracked now.
On the other hand, the bigger role played by Internet is freaking governments. In Italy, a law has these days been passed allowing websites to be banned without justice decision (Given Joe regular attacks on Briatore, I wonder if this blog will remain available in Italy
).
More concerning, an eG8 meeting occured this year with the target of controlling internet.
Very fast moving world indeed the internet world ! Maybe in 5 years Joe will have to sell his magazine through iTunes & Android and give them both half what he gets.
Justin Timberlake? Didn’t he finance facebook?
James,
I think in the movie he did…
Joe agreed on that, LinkedIn is very useful, I am on it and use it to build contacts, but no one has sent me a bill for being there yet, or emailed me mailshot and there appears to be only a small amount of advertising – so who pays for it I have no idea!
All of you talking about the fact Murdoch made a huge loss – please see this.
http://news.bbc.co.uk/1/hi/business/5254642.stm
Myspace got a significant amount of income from Google – I doubt they met their traffic targets, but I expect Murdoch made most of his money back on it
Does anyone else remember, that ole Rupe got as much cash from a ad deal with Microsoft, as he paid for the thing, like an anchor sponsor? With interest rates at minus zero, he was in profit even if you ran the numbers at par. Few quid at the end? Nice one, mate. I’m just cooking and all that, so up to you to fill the blanks, but i remember it being wicked timing, because Microsoft had just bought out a big online ad dealer, and wanted to show the world big steals. Ohh, err, missus, luverly. Think i know who sold who. So good, even the programming geeks who don’t really programme but fiddle with websites, got it. Not ripping the mick, all out there for the finding. – j
News Corp may have done well out of television, and they seem to use paper media as a loss making promotional tool for their tv businesses. But they don’t seem to have a clue about the internet. MySpace used to be clunky even when it was the number 1 social network. News Corp turned clunky MySpace into unusable MySpace. The thing just isn’t competently thought out or programmed. They deserved to lose their half billion dollars, and if they manage F1 as competently, they’ll lose a lot more. Facebook works. Google works x 10. There are clever people who understand how the technology works. It’s about the interface, it’s about the user base, it’s about timing, and it’s about promotion.