Poor Rupert Murdoch. For a man who was once ‘hailed as an internet genius’, looking at the ruins of his once-mighty web empire must be a painful experience.
First, his company News Corp announced a £2bn loss on advertising revenue, which prompted the mogul to vow he would charge for online content before the end of 2010. “Quality journalism is not cheap, and an industry that gives away its content is simply cannibalising its ability to produce good reporting,” he said.
The comments prompted widespread criticism from those at the top in the tech industry. “In general these models have not worked for general public consumption because there are enough free sources that the marginal value of paying is not justified based on the incremental value of quantity,” said Google chief executive Eric Schmidt, while Guardian columnist Roy Greenslade, political blogger Guido Fawkes and former nytimes.com general manager Vivian Schiller all called the vow a ‘huge mistake’.
Now Merrill Lynch equity research analyst-turned-technology blogger Henry Blodget has dubbed MySpace, the social networking site News Corp acquired in 2005, as ‘pretty much worthless’.
In a post on US website Business Insider, Blodget pointed out when News Corp first bought the site, the deal was hailed as a coup for Murdoch. “[It] was cited again and again as evidence that Rupert Murdoch had something no other mainstream mogul had: Brains enough not to get taken to the cleaners when it came to buying internet properties,” he wrote.
But with ‘shrinking revenue, losses, declining market share, loss of mojo and market leadership’ in the face of weed-like growth from competitors Facebook and Twitter and users abandoning the site in their droves, MySpace is rapidly becoming a dead duck.
“If MySpace follows in the footsteps of other internet relics [such as Lycos, Inforseek and Excite], how much might it actually be worth right now?” asked Blodget. “Next to nothing."
“Rupert has his work cut out for him.”