Sunday, December 06, 2009

the rise and fall of myspace

FT | To say MySpace was a hot property back in 2005 is something of an understatement. Its rapidly expanding tribe of users had attracted the attention of other potential buyers. Viacom, for one, a rival media conglomerate that owns companies such as Paramount Pictures and Comedy Central, was eyeing it as a vehicle to revive its flagging MTV channel, a similarly youth-oriented brand.

But Murdoch got there first and the resulting $580m deal transformed his image at a stroke. The curmudgeonly media baron, whose achievements included breaking the Fleet Street printing unions and launching the conservative Fox News cable channel, had re-invented himself as a 21st-century internet hipster. It took Wall Street a few months to appreciate the magnitude of the deal but the purchase slowly began to imbue News Corp with an almost priceless commodity it had lacked: cool.

Millions of teenagers across the world adored MySpace, spending hours every day connecting with each other online and fine-tuning ­personal profile pages that reflected their tastes and personalities. News Corp had new-found cultural cachet thanks to them – and to the popularity of MySpace with new filmmakers and musicians such as the Arctic Monkeys and Lily Allen, who became sensations on the site, releasing songs to fans before their first albums appeared.

Months after the acquisition, Murdoch had another reason to feel pleased: MySpace signed a three-year advertising contract with Google worth $900m – effectively paying for News Corp’s purchase. Google bought the right to become a fixture within the MySpace site, enabling it to display its text adverts to the network’s millions of users. This prize was highly contested, with Yahoo and Microsoft falling over themselves to win the business before Google triumphed. Larry Page and Sergey Brin, the ­founders of the search engine, flew in by helicopter to seal the deal at a starry News Corp retreat at Pebble Beach where the guests included Bono and Tony Blair.


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