Myspace Bake-Off Starts Wednesday and–Despite Reports–No Bidder in Lead (and No Zynga Interest Either)
While no one inside or outside Myspace owner News Corp. expects fireworks and giant piles of money, the tire-kicking for the long-troubled social-networking-turned-entertainment site actually starts Wednesday.
That’s when about a dozen interested parties will finally get a walk-through of the books and more by management and the serious talks begin.
But, said several sources, despite a variety of reports of various interested buyers, no deal for the Beverly Hills, Calif.-based Myspace is imminent with any one of them.
Instead, most expect some kind of outcome within two weeks at the earliest.
Among the possibilities is anything from an outright sale to partnership that continues to involve News Corp., which has engaged Allen & Co. to conduct the sad proceedings.
Among those in the fray are, as has been reported, music video network Vevo, owned by several media giants. It is the most prominent strategic suitor for Myspace.
But talks with Vevo are preliminary, as are all others.
In fact, most of the others interested are as expected: moneybag private equity players, such as Providence Equity Partners and Silver Lake Partners. Both have been in discussions with News Corp. in earlier efforts to offload Myspace.
Interestingly, Criterion Capital Partners, which bought AOL’s Bebo social networking site for less than $10 million last June, is not in the bidding as yet.
Neither is Zynga, the San Francisco casual gaming start-up. Various stories had rumored of its interest in Myspace, but they are inaccurate. In addition, neither AOL nor Yahoo seem likely bidders either.
And it goes without saying that the Silicon Valley social networking site that did Myspace in–Facebook–is also not a buyer. So too Google, which–back in the headier days–handed Myspace a fortune as part of an ill-advised advertising deal.
In any case, whoever buys Myspace needs a lot of patience, which seems to have run out at News Corp., where top execs take turns bashing it to shareholders.
That’s no surprise. After a laudable though glacial redesign as a music and entertainment hub last fall, traffic has declined 44 percent in a recent month from a year ago, to 37.7 million unique visitors in the U.S.
Worse still, the News Corp. unit that houses Myspace showed an operating loss of $156 million in the recent quarter, mostly related to a severe drop-off of advertising revenue at the site.
That plunge in fortunes will surely have an impact on the price buyers are willing to pay for the once iconic brand.
(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)