MySpace CoFounder Says Purchase Was A Scam 214
Jonathan writes "Brad Greenspan says he's the real founder of MySpace, not Tom, and the sale of MySpace to News Corp. was a criminal act. In a nine-chapter report, he describes how this was accomplished by hiding the value of the site from Intermix Media's shareholders." From the article: "How was News Corp able to turn $327 million into $20 billion or more of value within a year? The Myspace/Intermix transaction was so low compared to other internet transactions that it is raising eyebrows by analysts and media everywhere. Everyone seems to be asking how News Corp. got such a good deal. It seems too good to be true! After signing the transaction to buy Myspace & Intermix (but prior to the closing), News Corp. itself even showed how strangely little it had paid for Myspace by immediately paying $3.99 per monthly page view for slow growing comparable IGN. News Corp. paid only .03 cents per monthly page view for the hyper fast growing Myspace. Therefore, we can conclude that the fair value of Myspace was 100x or more what News Corp. paid! "
Sounds like sour grapes (Score:5, Interesting)
Re:Sounds like sour grapes (Score:5, Informative)
If he were in Canada (Score:5, Informative)
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Ah Yes the venerable Slashdot summary. Right up ther with Cronkite.
Re:Sounds like sour grapes (Score:5, Informative)
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Re:Sounds like sour grapes (Score:5, Funny)
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Awwww
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Nope. It's certainly illegal in most states, but not all. As far as some sort of federal statutory age limit, there isn't any. Does that blow your mind, or what?
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http://www.ageofconsent.com/ageofconsent.htm [ageofconsent.com]
Just Ctrl+F for "New Mexico"
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Tax avoidance (Score:2)
Of course we have a fucked up market value system where they decide how much your house is worth, forgetting that it's only really worth what someone will pay.
Re:Sounds like sour grapes (Score:4, Insightful)
Re:Sounds like sour grapes (Score:5, Informative)
Actually, you can. And you can even win the point in court. You basically say, "Your honor, there's no reasonable way I could have agreed to sell my house for $20. This was not intended to be a gift and comperable homes are worth $500,000. The contract is unconscionable and should be voided."
The court then agrees that the contract is unconscionable and voids the sale.
There is a famous case involving a cow that was supposed to be sterile but had a calf a few months after the purchase. I forget the name of it. The seller thought he was selling a sterile cow and priced it accordingly. When he found out it wasn't, he asked for more money. When the buyer refused saying, "Hey, I thought the cow was sterile too. Tough luck." So the seller sued and won.
Not quite (Score:4, Informative)
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So... if the new owner voided the sale and gave the cow back, would he get to keep the calf since it was not part of the orgion
Re:Sounds like sour grapes (Score:5, Informative)
http://lawschool.mikeshecket.com/contracts/sherwo
http://www.law.pitt.edu/madison/contracts/supplem
There is some more discussion of the topic in general at:
http://islandia.law.yale.edu/ayres/mutual.htm [yale.edu]
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It could be worse for techies... (Score:5, Interesting)
Re:It could be worse for techies... (Score:5, Funny)
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Typo (Score:2)
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Absolutely correct. When the guy thinks MySpace, which is a money LOSER, is worth $20B, you know that they guy knows nothing about math, nor business. That guy reminds me alot of the Web I days when many execs thought that eyeballs (i.e. web traffic) was the only thing that mattered and generating revenue was irrelevant.
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They most likely did, but a) they might not have had the technical expertise to understand the issues and b) as the buying party (who would benefit from the discount), they had millions, if not billions of reasons to overlook the problems.
In hindsight (Score:5, Funny)
Gates never worked out of a garage (Score:4, Informative)
Hewlett and Packard, Jobs and Woz, and even Page and Brin worked out of garages. Gates was born to one of Seattle's richest lawyers, and probably hasn't ever set foot in a garage.
Yeah! (Score:5, Funny)
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Re:Yeah! (Score:5, Funny)
News corp got ripped off... (Score:5, Insightful)
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The idea is to make enough by driving the car to work (for example) that you make more than you paid for the fuel.
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However, since http://facebook.com/ [facebook.com] is now open to everyone; everyone i know is now using that for thier social networking needs.
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Answer: Three hundred. Three to do the programming, three for QA, and 294 to lay off right before Christmas.
Seriously, do you have a cite for that 300 figure? Most of the concepts behind software like MySpace are fairly trivial, with scalability being the most difficult hurdle. It seems like a reasonable number of developers would be twenty to thirty times fewer than 300.
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So, they could be developers or IT staff. The rep I talked to was interested in my AJAX background. *shrug*
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I should've realized it was past its peak the moment I started considering getting an account. I'm so far behind the curve on every fad, it should've tipped me off immediately!
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yeah, as soon as the world runs out of pubescent teenagers, pedophiles and greedy VCs / media corporations.
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Re:News corp got ripped off... (Score:4, Funny)
I know everybody my age uses Myspace. I patently refuse not because I mind social networking sites, although I think that's kind of a highbrow name for them, but because the average Myspace page looks like it was created in 1994 by a visually impaired thirteen-year-old with a stock of clip art and animated GIFs.
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combine gmail, google calender and add in a social network function and they could be a serious player in the social network market. apply tagging to friends lists along with mail and allow tags to be used on calendar events, such as a "school" tag that could allow your classmates to see your school schedule, but keep it private from people not tagged as school, or allow only people with certain tags to comment on your profile, or require certai
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Why does that get rated insightful? You might as well start claiming Yahoo hit its peak and is only coasting on momentum too. Look at the alexa [alexa.com] stats. I don't see any overall decline in myspace. It's had a solid year of growth. There's no way to conclude it's about to tumble into oblivion. In fact, the whole idea is that social networking IS about moment
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Oh, momentum is great alright, and if nothing else changes, MySpace will last a long time. But first, consider the "meme"ness of social networks. MySpace's worst nightmare is that someone will post on their MySpace page "Wow! This web3.0networksite.com site is awesome, I'm making a profile there!" How many hours will it take for that to reach their entire network?
Netcraft Confirms it: MySpace is dying. (Score:5, Funny)
Yet another crippling bombshell hit the beleaguered social networking site today when recently discovered that its marketshare has begun to seriously slip, due to mainly to other sources of personal videos, such as Google's own service and uTube, combined with modern teenager's lackluster desire to socially network. Current random surveys indicate that a large number of new user signups over the last 3 months have mainly been middle aged single men and U.S. Senators.
You don't have to be a genious to see the writing on the wall: All the teenagers that want to be on MySpace already have accounts, and there simply aren't enough pre-teens coming of age to maintain this rate of growth. The future of MySpace is indeed bleak.
When asked for comment, MySpace founder Brad Greenspan replied "look, I just need a few weeks before you print this..."
MySpace still on the upswing (Score:2)
Google Trends search: [google.com]http://www.google.com/trends?q=myspace [google.com]
Nice attempt at making up data on your own, though. Maybe it'll work next time.
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Myspace is already past the height of its popularity, its just coasting on momentum which will run out eventually
Can you please back that claim with.. anything? All I see is the ever increasing number of members on myspace, and now with the new multilangual versions of myspace it can only get worse. For example, hardly anyone knows MySpace in France, yet.. because so far it was all in english, but now the french section was launched just a few weeks ago..
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Please let this be true! (Score:2)
And why will the lawsuit go nowhere? You, as shareholders, are investing in the company. Unless you have a controlling share, you have little control over the company. You invested in their ability. When they sell out for less than you hoped, you obviously invested in stupid people. Stupid people give stupid results, regardless of the industry.
Minority rights (Score:2)
Quite often there are lawsuits against the company or management for actions against the best interest of the shareholder.
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My source for a lot of this is an article from The Economist back in May (link [slashdot.org], but you'll probably have to pay to read it.) Basically, it says that although shareholders have considerable rights in theory, in practice the rules are set up to favor management.
Owners vs Managers (Score:2)
The managers are simply employees there to run the company the best they can, at the owners discretion.
Same theory applies to small family run companies to large multinationals. It's the owners to do with as they please.
Those circles are probaly the "expert management" and not the shareholders.
I do want a say in how the companies I own stock in are run, part of that is I choose companies with good mana
If I had that much money.... (Score:5, Funny)
Ok, who's the wise guy? (Score:5, Funny)
Re:Ok, who's the wise guy? (Score:5, Funny)
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i founded myspace (Score:5, Funny)
Re:i founded myspace (Score:5, Funny)
I see you followed those same principles in the site you link to [griefmovie.com] in your sig (and the puncuation in your post).
Re:i founded myspace (Score:4, Funny)
Article hosted on a Cablemodem? (Score:3, Informative)
Poor guy.
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$3.99 / monthly page view (Score:2)
Nobody's offered me 1/100th of $120k...yet
or does the water get him instead? (Score:5, Funny)
Or can we conclude that they paid 100 times too much for IGN?
Stupid (Score:2, Insightful)
unfriended! (Score:5, Funny)
TFA mirrors and a link (Score:4, Informative)
Other news articles with similar content: http://news.google.com/news?hl=en&ned=&ie=UTF-8&q
This guy gets ripped off by News Corp a lot (Score:2)
see: http://sunbeltblog.blogspot.com/2005/09/who-is-bra d-greenspan-and-why-is-he-so.html [blogspot.com]
and
http://www.insiderstocksales.com/insidersales.htm [insiderstocksales.com] (cool flash if your into that kind of stuff)
how ironic. (Score:2)
or something like that. Guess you have to see it from his point of view
Non slashdotted article (Score:3, Informative)
http://www.pcmag.com/article2/0,1895,2025069,00.a
-D
Dear God... (Score:5, Funny)
Oh well (Score:5, Funny)
Bad boys bad boys, whatcha gonna do (Score:4, Funny)
Crucifixion... (Score:2)
Whatever the deal was ... (Score:2)
Valuation of companies is an artform (Score:3, Insightful)
"I bet if you extrapolate the numbers into Calender 06 (using 4thQ of our FY05 as the main driver) and include 3-5mm in cost savings the ebitda is in the 40-50mm range. Can someone please take a look at that asap. We will be valued off of calender 06 numbers
"Deutsche assumed that by 2008, Myspace would generate $100 million in revenue for that year."
And the fact the company was purchased for $580mm (according the PC Magazine article), shows that the company's valuation/sales price was appropriate.
Standard fare for M&A is 3-4x current year's revenues for a company. You can't value a company based upon what it *might* do next year (because every company likes to be very optimistic about *next* year's revenues!). So if Myspace was set to do somewhere between $60-100mm in 2006, then they got somewhere between 5.8x to almost 10x their revenues. These are already extraordinary numbers.
To suggest they should've gotten 20x or 25x 2006 revenues is a number nobody would believe.
And the reason for a "quick" close? A deal isn't done until it's done. All parties usually like to close as quickly as possible on a deal because it means neither side will get cold feet. Of course both sides also allow time for due diligence, a part of which is valuation.
But valuation of companies is more "art" than it is a science. Outside of the 3-4x revenue rule, valuations can be all over the map (hi Google!).
Wait a second.. (Score:2)
Comment removed (Score:5, Insightful)
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IGN Page Views are WAY more valuable (Score:2)
This is how it's done folks (Score:2)
Then, suddenly, they sell Fastclick to Valueclick at below market prices.
How was this accomplished. Possibly with handshakes and back room deals. No one
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Similar story: A couple of years ago I upgraded the motherboard, CPU and RAM on my main PC. I then shifted the old mobo/CPU/RAM to my spare "expendable" system. The hardware I took out of that system was old enough (the CPU was a K6-2), and wouldn't work with anything else I had, that I figured I'd just sell the lot on eBay rather than break it up any further.
Silly me, as I discovered dur
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duh.
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Re:fp (Score:4, Funny)
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It's racist so I should feel sorry for him, or outraged. But it's so nonsensical and all over the map that it's hard to think the author is actually racist, I can only picture that he resembles that hyped-up coffee drinking kid from South Park.
But seriously, I've never laughed harder at a slashdot forum post.
Don't mod his as Flamebait. This guy is an internet treasure.
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don't feed the trolls please.