Web2Summit: What News Corp. Got from MySpace
There's been some talk on the Radar back-channel springing from John Battelle's quoting, during his interview of Rupert Murdoch and Chris DeWolfe, the statistic that "12% of Internet usage in the U.S. is on MySpace." A simple -- but misleading -- extrapolation would be that if 12% of U.S. Internet traffic is worth $580 million (roughly what News Corp. paid for MySpace), then the total value of that market would be around $5 billion. That's a tremendous understatement, as Google's valuation shows. And it suggests that, despite the chatter at the time of the acquisition, it looks like the MySpace purchase is, already, quite a bargain for News Corp.
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tags: web 2.0, web 2.0 summit
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FYI, this is where they got that 12% number:
http://blog.compete.com/2007/07/11/compete-attention-200-june/
note the trend as well (although in more recent months the trend has not been as kind).
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alex tolley [10.18.07 04:33 PM]
"suggests that, despite the chatter at the time of the acquisition, it looks like the MySpace purchase is, already, quite a bargain".
Utter BS. The value of anything will be the sum of the discounted projected returns. MySpace could gobble up 100% of internet use - bandwidth, eyeballs, whatever metric you want, but that has no bearing on its worth. A company could hog the majority of the internet usage metric but if it was free, then there would be no value.