MocoSpace looking to buy MySpace
MocoSpace, a Boston-based mobile social network operated by JNJ Mobile Inc., is interested in buying MySpace now that the web-based social network has been put on the block by current owner News Corp., and CEO Justin Siegel said that News Corp. has already responded to their advances.
Context & Ripple Effects
MySpace's slide has been long-documented: teens were drifting away as early as October 2006, News Corp floated swapping the site for a Yahoo! stake back in 2007, and by 2009 it was shopping around CEO options. The January 2011 confirmation of roughly 500 layoffs — 47 percent of staff — capped a run of bad news that also included an all-time traffic low of about 50 million monthly uniques and steady attrition of mid-level managers.
Now News Corp has formally put the property on the block, and the first declared suitor is not a media conglomerate but MocoSpace, a Boston-based mobile social network run by JNJ Mobile whose CEO Justin Siegel says News Corp has already responded to its interest — though that response remains unconfirmed beyond Siegel's account. A mobile-first buyer bidding for a shrinking web network is the notable twist in what had looked like a distress sale.
First-order effects
- News Corp's divestiture process now has at least one named bidder outside traditional media, giving the banked sale leverage beyond the usual entertainment-company suspects.
- MocoSpace would acquire MySpace's remaining audience and music-destination positioning — analysts' cited case for its survival — at whatever fire-sale price the auction sets.
Second-order effects
- Other prospective buyers must now price MySpace against both its eroding traffic and the possibility that a small mobile operator sees value they don't, which pressures bids downward rather than up.
- MySpace's surviving staff, already thinned by the January cuts, face a second round of integration risk under an owner with no track record running a large web property.
Third-order effects
- If a mobile-first operator can outbid media incumbents for a founding social network, the first generation of web-scale social platforms exits as distressed inventory while the center of gravity moves to phones.
- The episode reinforces that legacy social networks are now valued for their residual audiences and content rights rather than growth — a template for how the next round of displaced platforms will be sold.
The trend: First-wave web social networks are exiting through distressed sales, with mobile-first operators emerging as unlikely bidders for legacy audiences.