Ad company buys Myspace for $35m, could harvest users' data - media
Specific Media, a digital media company from California, today announced that it had partnered with American singer-turned-actor Justin Timberlake to buy Myspace from Rupert Murdoch's News Corporation for $35 million.
But murmurings abound in the tech world that the company was more interested in collecting the details of users to provide a new target audience for its advertisements.
Myspace was once the biggest social media kid on the block; News Corporation bought the company for $580 million in 2005 and in 2007 there were reports that analysts had predicted a revenue turn over of $1 billion by 2010. But with the growing, or rampaging, popularity of Facebook, Myspace steadily lost commercial viability. Word is that News Corporation wanted $100 million for the ailing social networking site when it put Myspace up for sale this year, roping in investment bank Allen & Co to find a buyer, but settled for 65% less when it sold to Specific Media and the Timberlake.
Speaking of JT, the release from Specific said he would take an ownership stake and play "a major role in developing the creative direction and strategy for the company moving forward."
From NSync to synched in? (I apologise for the quality of that joke).
News of the deal was broken by AllThingsD, who also reported that the acquisition involved halving Myspace's 400 staff, other cost cuts, and that it was likely the chief executive and other top staff would stay for an interim period only.
And a Wall Street Journal article highlighted the fact that acquisition of Myspace would give the media company access to data about Myspace users which could be used for ad targeting.
Considering Specific's release said the company would "leverage the Myspace social networking infrastructure to deploy socially-activated advertising campaigns", that doesn't seem a bad guess.
Chief executive Tim Vanderhook told CNBC Specific intended to trade on the star-power of Timberlake to create a celebrity-driven destination for those looking for original content and communication with celebrities. Similar to Twitter, Mr Vanderhook said the difference would be a site which would draw consumers, and where ads could be posted. Mr Vanderhook felt Myspace could be Specific Media's new ad platform, with 70 million users, which would allow users to share their favourite ads with friends.
Whether Specific Media intends to utilise Myspace users' data for targeted ad campaigns or to create a portal for star struck fans and celebrities dying to share original content, in the spirit of sharing favourite ads with others: