Rupert Murdoch lost nearly his entire investment in MySpace the other day when he sold the failing social network to musician and actor Justin Timberlake and an ad agency he backs for some US$30 million. This was a good deal less than the US$500 million-plus Murdoch paid for it.
Why did Murdoch make such a bad investment? Because he hoped to use the network as a vehicle from which he could disseminate news. He wanted to make MySpace into a mechanism to deliver current-events content. When it didn’t work out – and he must have known that fairly soon – he obviously lost interest. And as his interest waned, so did MySpace.
This speaks to Murdoch’s desperation – and mainstream media’s generally. In a digital world, he is willing to burn US$500 million simply to confirm that a social network is not a news delivery system. I could have told him that for a much lower fee.