Now Fox can take its headlines directly from the Onion, rather than the two entities constantly parroting each other (albeit one unintentionally). The Onion has cast its lot in the social networking sphere and tied its fate to MySpace, which may be the punchline in the vegetable’s comical history of trying to penetrate the social networking sphere.
The once undeniably awesome blossom has taken a hit with its most recent ventures. The Onion’s fate is still tied to print and online (print), with the kerplunk of the “Onion on your PDA” campaign followed by the “it’s not as good as we thought it would be” Onion News Network.
Despite some bad harvests, the Onion is a sizable media patch, as the print version has a circulation of 3 million and the web portal is trafficked by 4 million users a month.
Some highlights from the half-serious press release:
“The news business is like the tobacco business: you want to reach new readers at as young and impressionable an age as possible,” Onion president Sean Mills said. “MySpace was, of course, a natural partner in that regard.”
“The Wall Street Journal is all well and good, but the Onion News Network represents the best in hard-hitting investigative journalism (at least on MySpace),” said Jeff Berman, GM of MySpace TV. “Also, we lost a bet.”
This is a list of people who we respectfully submit are liars: CNBC’s David Faber, Thestreet.com’s Nat Worden, and Reuters. We believe these entities to be capital ‘L’ small ‘i’ small ‘a’ small ‘r’s because among them they share the distinction of having reported or re-reported this morning that there will be an official announcement of News Corp.’s Dow Jones victory tonight. Nothing personal, it’s just that we no longer believe the words coming out of the mouths of people who say anything—outright, implying, leading, lip synching—that even hints that this whole thing will be conclusively finished before hell freezes over. We WANT to believe them, we just can’t. Know anyone you’d like to add to our list? Send his/her name to tips at dealbreaker dot com.
In other news, MySpace co-founder Brad Greenspan sent an open letter to Dow Jones shareholders detailing a new proposal (he’s done this before, several times) in which he would invest $600 million in cash and stock in three joint ventures with DJ. Greenspan says he’s received “interest” from five “credible” investor groups, though he would not disclose their names, and their profiles are set to private. Brad informed shareholders that he and his investors “can meet this week” in order to “firm investment commitments,” but starting next week things are going to be really tight for him, so if Dow Jones could really get back to him A-sap to nail something down that would be solid, just name the time and place, but seriously, get back to him soon, otherwise, who knows, he could be busy. Dow Jones to Agree To Takeover by News Corp. [CNBC] Dow Jones Deal Gets Closer [WSJ] Dow Jones Soars As Deal Appears Near [thestreet.com] News Corp., Dow Jones deal expected Tues [Reuters] MySpace Co-Founder Makes Another Dow Jones Proposal [Bloomberg]
After activist shareholders pushed Terry Semel out of Yahoo last week, his successor Jerry Yang needs to raise the floundering search engine’s advertising revenue quickly or re-don his jester cap as Chief Yahoo. Social networking is the obvious answer and after a potential Yahoo-Facebook deal fell apart earlier this year, Rupert Murdoch is the man to see. The Times of London, a News Corp. holding, reported yesterday that Murdoch and Semel had been in talks to trade MySpace for a 25% ($10-12bn) stake in Yahoo.
It is more than likely that Yang will pursue this deal with the leading social networker, even at Murdoch’s inflated price. Rupe paid $580mn for MySpace two years ago, but after Facebook’s financer said he wouldn’t sell for less than $8bn, a $10bn MySpace shouldn’t be anathema to Yahoo. If Yang balks at the Murdoch proposal, it may go down with Semel’s infamous missed opportunity to buy Google and will probably mean an interim-only CEO appointment.
With the news, Yahoo traded up 1.6% to $28.08 and News Corp. was up 1% to $23.92. Yahoo! For MySpace? [Forbes] The social network bubble [Valleywag]
On the stage of comic Dow Jones bidding foils, enter Brad Greenspan (pictured, really leveling with us), otherwise known as the guy who owned the nest that MySpace hatched in. That is until Rupert Murdoch stole the hatchling for 0.1x, which is something ‘Beenspan’ is more than a little bitter about.
Beenspan outlined his vendetta bid in a letter to the Dow Jones board. He wants to buy 25% of DJ’s stock at $60 a share (about $1.25bn), opposed to the people who want to buy 100% of DJ’s stock for $60 a share or more. This, apparently, gives the deal the flexibility to provide willing sellers with liquidity, while ignoring the people who don’t want to sell in the first place. It also gives Beenspan the ability to avoid explaining why there isn’t enough cash in his wallet, which can be an embarrassing first date.
What Beenspan brings to the table are these new-fangled things called social networks. Scratch that, they aren’t social networks, they’re business networks. It’s not Web 3.0, it’s Web 3.05, beta – the WSJ as a business network with user-generated content, enhanced interactivity, and other buzzwords. Beenspan also wants to tart up the WSJ with the revolution that is video content, lots and lots of video content.
This original brilliance provides the following relative advantages, according to Beenspan’s letter:
1) KEEPS THE DJ/WSJ INDEPENDENT FOR THE BENEFIT OF LARGE CONSUMER BASE. (or at least free of a “fair and balanced” take on finance)
2) PROVIDES PREMIUM LIQUIDITY EVENT. (at a convenient discount to other premiums)
3) ALLOWS DJ TO GO ON OFFENSE. (essential when WSJ plays the Colts)
4) UNLOCKS HIDDEN VALUE. (like when you duck behind the last gray block in stage 1-3)
5) PROVIDES UPSIDE FOR EVERYONE! (“Myspace Tom” will be your friend and business partner, and so will Amber, who insists that she’s online in a video chat room right now and that you don’t need a credit card to talk to her)
Until recently, we’d been vehemently opposed to MySpace. We were never really that into FaceBook either but were peer pressured into opening an account (you know how it is) back in late ’04 when we were young and it was in its heyday. Let’s be honest—the two sites exist solely for the purpose of facilitating hook-ups (whether consensual or non, between “barely-legal” and actually legal individuals) and we’ve always preferred lubing ourselves up with alcohol and meeting and mating the old-fashioned way.**
Unfortunately, we’ve come to realize that not only is this not how the vast majority of our peer group would like to do it, but it’s not how—wait for it– Private Equity firms would like to do it. Exhibit A: the friend request a DealBreaker reader was sent from Graystone Park Enterprises, which has apparently entered the land of jailbait and do-it-yourself web design for what seems to be lead-generation purpose. Behold it in all its horrifying and mystifying glory, here. Now if Mark Zuckerberg could just manage get the Blackstone crew to open an account with him, surely he’d be able to leverage that kind of stret cred into the $2 billion he’s been holding out for all this time (but we hear Schwarzman and co. are partial to Friendster, so who knows).
We always thought the ubiquitous Tom was the founder of MySpace. He’s everyone’s first friend on the site, but apparently Tom was just the public face. The real founder was Brad Greenspan, at least according to Brad Greenspan. What’s more Greenspan says the sale of MySpace to News Corp. was a criminal act, accomplished by hiding the value of the site from Intermix Media’s shareholders.
He’s written a nine chapter “report” on the deal, and is calling on regulators to investigate—and eventually unwind—the deal. (Hint: not going to happen.) We’ve just skimmed the report, and it comes off a bit overheated. But we suppose finding out that the company you once ran might be worth $15 billion a few months later would get anyone heated up.
Free MySpace Report [Freemyspace.com]
Can we take a break from all this Hewlett-Packard business for a minute and talk about MySpace? We first heard about MySpace when one of our favorite rock-and-roll lawyers posted a bulletin to her friendster account announcing, “I’m outta here! Check me out on MySpace suckers!”
In the couple of years since then MySpace has gone from a niche space for emo kids and the bands they love to a genuine cultural phenomenon. And it’s done this despite the fact that its search function is nearly useless and its user interface is completely heinous.
Yesterday RBC Capital analyst Jordan Rohan said that he believed MySpace could be worth $15 billion. This provoked gawking of disbelief from many observers, and flashbacks to 1999 for others.
Paul Kedrosky, however, has an even more cynical take. On his Infectious Greed blog he warns readers not to take the $15 billion valuation seriously. It was just analyst posturing, trying to get attention.
Like Henry Blodget during the bubble did with Amazon, and other analysts did with Qualcomm and others, putting up oversized estimates of a company’s value is a marketing exercise for an analyst, not an exercise in financial valuation. The number doesn’t matter; it is simply a piece of red meat to attract the media pack, like me saying, Draper-style, that one of my portfolio companies is worth a billion dollars (which it is, of course).
Ouch. That seems a bit unfair to Henry. He might have pumped his share of air into the internet bubble but all the evidence we’ve seen indicates that he actually believed his hype. And the best, most recent evidence of this is Henry’s own reaction to the MySpace valuation.
The most surprising thing about RBC analyst Jordan Rohan’s comment that MySpace could be worth $10-$20 billion in a few years is that he deemed this assessment “audacious”–and the press seemed to agree. Why is this audacious? In little more than two years, MySpace has come out of nowhere to become the 7th biggest site in the U.S. Per NetRatings, it now has 50 million monthly users–closing in on half of Yahoo!’s domestic user base–and it is still growing at a fantastic rate (a reported 250,000 sign-ups a day). MySpace recently signed a $900 million multi-year search deal with Google, showing that the revenue is starting to follow. Etc. Given all this, the theory that, in a few years, MySpace could be worth less than half of what Yahoo is worth with its now-battered valuation seems eminently reasonable. On its current trajectory, in fact, MySpace could end up being worth a lot more.
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