News Corp and Its MySpace Case
December 5, 2009
I have not recovered from my wonderful Delta flights from Louisville to London. In fact, the goose’s wings are tired. I was not in the mood for commenting about stories and issues that caught my attention. Then I noticed a headline from a newspaper under the control of the outfit that used to run Madame Tussaud’s Wax Museum. (No joke.) The headline was “The Rise and Fall of MySpace.” The idea is that News Corp bought MySpace.com when its perceived value was high: money, promise, and users. Now, under the firm hand of the hegemons at News Corp. the perceived value of MySpace.com is less money, little promise, and fewer users. Yep, these traditional media companies have figured out how to manage digital properties. There was one statement in the write up that merited the goose’s attention; to wit:
Murdoch himself was responsible for dealing the company the first in a series of blows. On a 2007 News Corp earnings call, a punchy Murdoch told analysts that Fox Interactive Media would generate $1bn in revenues for the 2008 fiscal year (up from about $550m in 2007). With MySpace representing almost all of Fox Interactive’s revenues, the implication was clear: Murdoch thought MySpace’s meteoric rise would continue. There was only one problem: the MySpace management team had no idea Murdoch had set them a new target until he opened his mouth. “It came out of thin air,” says a former MySpace executive. At a stroke, the site’s free-wheeling, entrepreneurial days were over: it had to perform exactly as expected – or else.
Read the FT’s article for more of this quasi-“we know what News Corp did wrong” view of a fellow traditional media company’s handling of a digital property.
Several observations:
- The write up makes clear that at one point in time, folks perceived News Corp’s heavyweight champion of business as “punchy”. Wow. Punchy as in punch drunk or as in too much fruit juice and vodka? Ambiguous but metaphorically rich.
- News Corp’s ability to manage programmers is interesting. Hopefully there will be a non fiction book from one of the “Sergey and Larry eat pizza” type writers. I want more of this insightful business writing.
- Any plan to save traditional media hatched by News Corp may have some MySpace.com DNA. Genes of greatness perhaps?
I thoroughly enjoy old media reporting on the foibles and follies of other old media company.
Stephen Arnold, December 5, 2009
Hark ye heralds of ethical blogging, this is a freebie. I think I will report this fact to the National Capital Planning Commission.
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One Response to “News Corp and Its MySpace Case”
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Punchy, according to Websters dictionary, means “forceful and vigorous”. What’s metaphorically rich about that? Seems a pretty appropriate description of Murdoch’s frame of mind to me.