MySpace Has been a “Calamity for News Corp,” Michael Wolff

By on 06/12/2009 5:45 PM @beet_tv

Michael Wolff, who has written a much talked about book about Rupert Murdoch and the rise of News Corp, sees MySpace in a downward spiral. 

In this interview with Beet.TV, he calls the acquisition of the social media site a "relative calamity for News Corp." because the giant media company "knows nothing about technology."

I caught up with Michael yesterday at the Advertising 2.0 conference after his keynote dialogue with Andy Lack, head of multimedia for Bloomberg. On stage, he said the valuation of MySpace would be somewhere around $600 million, about the purchase price.  He didn't give this valuation in the interview.

Michael is the media columnist for Vanity Fair and is the founder of news aggregation site called Newser,  I have a second interview on his start-up which we will publish later.

Nicholas Carlson reports on problems at MySpace on the Silicon Alley Insider. TechCrunch reported earlier this week of massive layoffs coming soon.  Reuters reports today that there is no comment on layoffs.

Last month at the Wall Street Journal's D: All Things Digital conference, Jonathan Miller and Owen Van Natta, the two new senior executives in charge of MySpace, were on stage with Walt Mossberg and Kara Swisher to talk about problems at the site and where they want to take it.  I've pasted that clip below:

Andy Plesser, Executive Producer

You can find Beet.TV up on the Huffington Post too.

Video Transcript

Andy Plesser:  Tell us about, you know, your thoughts now looking at MySpace in the context of the News Corp. acquisition. Sort of the history of it, the value now, good, bad. What are your thoughts?

Michael Wolff:  Well I think it obviously was a good acquisition at, at one point. It was an incredible acquisition from about 600 million to…an imputed valuation of, God knows, 15 million one day, 15 billion, 20 billion. But the truth of the matter is is that they were not able to sustain…they were not able to be competitive with, with  other companies, notably Facebook in this, in this, in this business. And I think that they weren't able to be competitive because, you know, News Corporation knows nothing about technology. So I think it was, the inevitable happened. And actually we've seen this again and again and again and again is that when mainstream traditional media companies buy technology companies they don't do very well and often they do terribly and often they actually collapse. So I think that's what we're looking at in terms of MySpace. It's no longer competitive, you know, it's it has, you know, it continues to have a very large audience, but that growth has become less and less and less and less and it will ultimately be no longer growth and it will reverse and…and unfortunately, I mean, to compound the situation, it's never really had a cogent or powerful business model. So even managing its decline…managing for cash is not, it's not a reality. I mean AOL in a sense had a similar experience bought by a, became involved with a traditional media company and it went into a precipitous decline, but it made a lot of money, so year after year as it gets smaller and smaller and smaller, you know it still is making, making money. But that's not gonna be the case with MySpace so I think it's it's a relative calamity for News Corp.

Recent Videos
image
If “Content Is King,” then “Distribution is Queen” as Paid Media is Essential,...

Mindshare, the media agency within WPP, has created some 250 branded campaigns for video and television over the past 9 years, says David Lang, Chief Content Officer and President of the agency’s entertainment division,  in this interview with Beet.TV  On the subject of viral video hits and paid vs. ...

image
Hearst is Building a “Netflix Model” Around Magazine Video Content

Hearst has just launched “Cosmo Body,” a daily fitness show which is advertiser-free and is  being offered on a subscription basis.  This is the first of what will be a number of Hearst titles and Hearst partners who will be part of a new “Netflix model,” explains Chris Grasso, SVP ...

image
Yahoo Gets Post-Web Analytics With Flurry: Jun’s Reichgut explains

Yahoo has bought itself a role in the advertising ecosystem that comes after the desktop web by acquiring mobile analytics firm Flurry last week. That’s the assessment of one cross-platform video ad tech vendor CEO. “A media company that was based on the web is now struggling getting in to the ...

image
Razorfish, Google & Videobloggers Drive 6+ Million Video Views for Unilever Haircare Campaign in...

A YouTube program in the U.K., designed by global agency Razorfish for several Unilever haircare brands, has driven more that six million views since its launch  in April, says Pete Stein, Global CEO of the agency in this interview with Beet.TV The program takes the pulse of Google queries on hair and ...

image
The Viral Video Is Not a Business Model

While the viral video hit can be golden for brands, it can’t be done consistently and it’s “not a sustainable business model” says Mitchell Reichgut, CEO and founder of the Jun Group, a digital video ad services firm that secures views for branded content on hundreds of publisher ...

image
TubeMogul Crushes Wall Street with 64% Rise on First Day of Trading

Whether the dramatic increase of the company’s stock price on its initial day of trading, which closed at 11.50, up $4.50 or 64%, can be sustained or not, time will tell.  For TubeMogul co-founder and CEO Brett Wilson, he is focused on “building a big, transformative company,” he told ...

image
Native Video Advertising on Mobile Devices Powers Growth for Jun Group

The dramatic rise of mobile, opt-in video advertising has helped fuel revenue growth for the New York-based adtech firm Jun Group by 120% in 2013 and the company is on pace for that kind of growth this year as well, says CEO Mitchell Reichgut  in this interview with Beet.TV. In the last few years, Jun ...

image
Simulmedia’s Morgan: TV Finally Embracing Ad Tech

Tacoda and Simulmedia founder Dave Morgan is just back from a fun week chewing over the TV ad tech revolution at Cannes Lions with Beet.TV He is interviewed on stage by digital media investment banker Terence Kwaja. In this AdAge article, Morgan concludes channel fragmentation, a desire for accountability ...

image
Comcast Serves up 13 Million Video Streams of World Cup: “TV Everywhere is Ready for its Close-up”

Comcast has provided  13 million video streams of World Cup matches to subscribers watching via digital devices.   That’s up  55% over the number of streams for the Soichi games, the cable giant says. The enormity of the digital consumption represents something of a watershed moment for “TV ...

image
Sling Rolls Out New Box With Added Mobile Features

Echostar-owned Sling Media introduced a new box to deliver pay TV channels to other devices. The “Slingbox M1″ and “SlingTVTM” are designed to be mobile friendly and are slated to retail for $149.99.  Here is the company press release. In the last year, Sling Media has been focusing ...

image
Digital Targeting Enables Consumer Choice in Storytelling, MediaCom’s Savic

CANNES, France — In a digital world, where transparency is the name of the game, brands can’t hide anymore. What works and doesn’t work is apparent every day, says Sasha Savic, CEO of MediaCom USA, during an interview with Beet.TV at Cannes. “We used to love our ideas. Now, it ...

image
Britain’s Mail Online, Growing Fast in U.S……and Making Waves

The British tabloid the Daily Mail, known as Mail Online,  has become the biggest English language newspaper destination site in the world.  It is growing quickly in the U.S., with a 30 percent  increase over last year, and monthly unique visitors up to 36,4 million, according to comScore.   That growth ...

loader