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Owner59 -> Loser Rupert Loses Billions over Myspace fuck-up. (7/5/2011 1:53:11 PM)
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Over a billion, up to as much as 6.4 billion in lost money and revenues.
http://arstechnica.com/tech-policy/news/2011/06/doing-the-math-on-news-corps-disastrous-myspace-years.ars
Doing the math
So what's the real damage to News Corp. from this botched online venture? Just subtracting the sale price from the original price tag and calling it a $545 million short-sale doesn't do it justice, because then you're ignoring the puts and takes of running the darn business. In fact, the whole process of figuring out the numbers is tricky because News Corp. and MySpace never talked about them. That's hardly unusual, as we still don't really know what kind of business YouTube pulls in for Google, for example, but it's annoying when you're trying to figure things out. So there's some guesswork involved.
Let's start by figuring out the initial situation. Intermix Media, the original parent of MySpace, made a net profit of $1.5 million in the twelve months leading up to the News deal. $37 million of its $88.9 million in total revenue came from the Network division, chiefly home to MySpace. The rest fell in from direct and online marketing of high-margin merchandise such as beauty products and inkjet cartridges. The e-commerce stuff quickly disappeared in the vast News machine, and I think it's fair to write it off as a discontinued operation from the start. The old Alena brand was mentioned in the exhaustive list of subsidiaries in the 10-K filing of 2006, but was gone the next year.
In 2006, the company happily highlighted that MySpace averaged 29 billion monthly page views in the US alone, boasting over 90 million registered users. But News never bothered to break out MySpace results, or even the larger Fox Interactive Meda operation of which it was a part, from the "Other" segment in its financial reports.
But traffic doubled in the first year, and MySpace was, as already discussed, mildly profitable at first. So let's say that sales in 2006 landed at about $70 million with a breakeven bottom line. From there, News Corp COO Chase Carey said that the bulk of that Other segment consisted of MySpace in 2010. By then, the division accounted for $1,5 billion in annual sales and a $575 million operating loss. (Ouch.) "Other" sales peaked in 2008, and never saw a profitable fiscal year in the MySpace era.
So if we start with about $70 million of MySpace revenue in 2006 and guess that "the bulk" might translate into something like 75 percent of the Other division, we can construct an overly simplistic yet instructive model of how it all worked out.
[:D]
http://www.huffingtonpost.com/2009/02/05/news-corp-suffers-stagger_n_164463.html
http://gigaom.com/2010/11/02/news-corp-paywall/
Couldn`t happen to a nicer guy.[8D]
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