Amazingly once worth up to $12 billion dollars, My Space has been ditched at an astounding $535 million dollar loss. The site's been sold for a mere $35 million to the highest bidder, in a sad demise that includes Justin Timberlake as investor. Facebook -- the company that helped put MySpace under--is valued at roughly $80 billion.
Its parent company was hoping for about triple -- asking $100 million for the now-struggling company. Just five years ago the company was literally worth billions.
The My Space website was bought by Rupert Murdoch's News Corporation bought in 2005 for $580 million. One year later, in 2006, Google signed a whopping $900 million deal to sell ads on the social networking site. By 2007 My Space had 300 million registered users and hit a valued high of $12 billion bucks. And then Facebook came along.
MySpace was crushed by the new social networking website on scene. Ironically, Facebook was launched a year after MySpace came into existence.
The ad company that just bought MySpace in June got a bargain: News Corp was asking almost triple the price for the ailing My Space site, but settled on a mere $35 mil from "Specific Media" in a deal involving stock. Perhaps sadder yet for the Beverly-Hills based MySpace, the purchase is from a European company in Manchester, UK.
Justin Timberlake's coming on board as "Creative Director" for MySpace -- Timberlake one of the investors.
It's all a bit ironic: Here Facebook sunk its battleship, and now MySpace is betting on the man who played Facebook's Sean Parker -- in "The Social Network" -- to bring a fix.
It all marks a sad day for the once-hot website that now has to throw out roughly half of its 500 remaining staff in the deal. My Space already cut almost one-third of its staff only a little over a year ago in April 2010, then the website made an additional cut of nearly half the remaining staff at the year's start in January 2011.
It was only two years ago that MySpace employed almost triple the staff it does today -- more than 1400. That number's about to be 250. Justin Timberlake will be one of the valued few.
The company that sold for a measly $35 million is expected to chalk up $183 million in ad revenue for the year. The My Space peak for annual ad revenue was $605 mil.
In the meantime, there's startling numbers being attributed to current valuations for newer websites like Zynga, which creates online games and apps "CityVille" and "FarmVille". Zynga's initial public offering (IPO) values it as high as $20 billion -- almost double MySpace's highest valuation at its hottest point. LinkedIn, which has already gone public comes in with a valuation of $8.6 billion.
For an astounding figure, next year when Facebook goes public with itS IPO analysts are plugging the company will be worth $80 billion dollars -- or more.