Today he’s agreed to sell his social media site MySpace (acquired for $580m back in 2005) to US company Specific Media for just $35m. As recently as 2007 Myspace was valued at a staggering $12bn as it then led Facebook in traffic with decent ad revenues.
On the positive side of the ledger, UK culture secretary Jeremy Hunt has waived through News Corp’s bid for the 61 per cent of UK satellite broadcaster BSkyB it doesn’t already own after settling terms for an independent Sky News. Now all Murdoch has to do is agree a price with the BSkyB board led by CEO Jeremy Darroch.
MySpace is a classic case of the way big companies can mess up businesses that began as small companies. When Facebook hove into view it attracted new users and kept existing ones by adding new features and opening the site to developers. MySpace, under News Corp, did neither.
But Specific Media (and its partner in the enterprise, singer Justin Timberlake) might just have got a bargain. MySpace still attracts 30m monthly users and a successful rebranding or revamp could make inroads into Facebook, which is itself suffering from accusations that it is too big and has become too commercial.
As for BSkyB, the argument now is over money. No-one else is likely to bid for the company given News Corp’s 39 per cent stake so Murdoch may try to stick to his low-ball bid of £7.8bn (700p a share) for the remainder.
The BSkyB board has said it expects another £1 per share which would take the bid to about £9bn. Murdoch might well go to this (BSkyB is on course to make more than £2bn profit) but would almost certainly jib at the demand by big US investor Fidelity for £10.5bn for the remainder.
But is there a Plan B for the BSkyB board?
There is actually, a suggestion that the board could pay shareholders (including News Corp of course) a special divided of £2.5bn sometime in the next 18 months if the New Corp bid doesn’t go through.
So Rupert isn’t home and hosed yet.
But he probably will be.