Wednesday, June 27, 2007

MySpace Getting Ready to Implode?

Interesting story below...

Deadline Hollywood Daily » MySpace Pair Looking To Loot News Corp: "Chris DeWolfe and Tom Anderson have made a very aggressive (some would term it rather fanciful) compensation proposal to owner News Corp for when their contract is up in October. They're asking Peter Chernin and Rupert Murdoch for a 2-year deal worth $50 million total. That comes out to $25 million each, or $12.5 million a year. Plus, the pair want a development fund of $15 million to invest in internet companies."

Is MySpace in trouble? It sounds to me that both DeWolfe and Anderson have one foot out the door. I think you have to not only be ready to, but expect to, walk out the door to make such a massive demand. I would imagine the thought process to be something like...

"I've had it with this place, let's get out of here before Facebook eats our lunch."

"Well, I'd stay as long as we get paid."

"Hmmm... yeah, for $25million in my pocket I'd be willing to go down with the ship."

"As long as they also pony up some money on top of that so we can find, and inflate, our life raft."

"Good point... let's get another $15 mil each that we can invest in the next thing - whatever that will be."


Don't get me wrong, I don't blame them for this approach... I just find it interesting. Who would run the place if DeWolfe and Anderson leave? I sure as hell hope it wouldn't be some old school TV exec. We are dealing with very fickle consumers where the switching costs from once service/network to another is relatively low - and lowering every day as more of these services expose open APIs. I've got to think someone is working on a simple "import all of my MySpace information" for Facebook as we speak.

Check out one of my earlier posts/predictions about MySpace.


Anonymous said...

Interesting backstage tidbit, and interesting interpretation.

Since FB is really not doing what MySpace does for music, where do you think the music traffic would go? Or do you think that MySpace would remain the music place, but the socializing elements that aren't about music might migrate elsewhere?

jherskowitz said...

IMHO, it is only a matter of time before Facebook becomes a haven for artists and content. Either through one or more 3rd party applications designed specifically to enable such use cases, or via FB jumping into the game themselves - or perhaps partnering with someone BIG. There's a little company named after a common piece of fruit down in Cupertino that has some influence in the digital music space - but doesn't (yet) have a social networking strategy to speak of. Wouldn't that be interesting?! Pure speculation, but I expect something big to shake out with FB on the music front....