Ouch! News Corporation stunned the world when it bought Myspace for $US580 million in July 2005, with many pundits applauding Rupert Murdoch, News Limited’s Chairman, for having the insight to hitch his wagon to the social networking bonanza.
However, five years later there are electronic tumbleweeds floating through Myspace, which has long been overtaken by Facebook in the fickle social networking stakes, and big business is still struggling to figure out how to make money from the internet.
News Limited reports the financial results of all its subsidiaries in the one report which makes it easy to spread bad results or investments among several companies or sectors, but the ‘Other’ category in to which Myspace falls in the company’s annual report has a very lonely $150 million loss sitting in the ledger, most of which can be attributed to Myspace.
Murdoch, who is not fond of getting things wrong, commented at a meeting announcing the results that “We’ve got to admit that, in the last three or four years, we made some big mistakes.” Uh huh. Anyone remember Friendster?
