Dragons in the Yahoo-MySpace Talks

The rumor, as yet unconfirmed, yesterday and today has centered around the possibility that NewsCorp/Fox Interactive is in talks with Yahoo to trade off MySpace in exchange for a 30% stake in the Yahoo Corporation. Given that that would value MySpace at approx $15B, the big winner would be Rupert Murdoch who bought MySpace 2 years ago for $580M.

Raw numbers aside, let’s look at what this deal could potentially do if it were to happen.

  • MySpace video would in the short term still favor Google’s YouTube, however ease of use restrictions will be lifted for Jumpcut videos.
  • Integrate Flickr photo sharing into MySpace and implement Facebook-style tagging of photos
  • Manage Yahoo! Fantasy Sports teams from within MySpace and display results.
  • Manage rights and buy/sell of Yahoo! Music from MySpace and in conjunction with MySpace artists
  • Eliminate Yahoo! 360
  • Allow sharing of MySpace modules to My Yahoo!
  • MySpace messaging via modified Yahoo! Mail
  • Premium MySpace content for folks looking to “hook up” in conjunction with Yahoo! Messenger and Yahoo! Personals
  • Integrated Yahoo! Search in MySpace
  • Integrate MyBlogLog into MySpace to enhance the “Friends” experience
  • Turn the Yahoo! Developers Network Loose on improving MySpace modules and user experience
  • Yahoo turns over 30% of its companies, possibly requiring shareholder approval
  • Increase Yahoo’s News reach via NewsCorp 28 newspapers, 27 of which are not in the United States and enhance other services via NewsCorp’s empire of organizations.

At the end of the day, if the deal happens and if Yahoo! executes well on and fires on every cylinder and if NewsCorp brought internet street smarts to the table (which is no slam dunk), this deal could be a very strong move for both companies. If not, someone is going to look very silly.

3 Replies to “Dragons in the Yahoo-MySpace Talks”

  1. Sorry I didn’t see you posted this yet.

    All great points, it will be interesting to see how everything plays out. It could be something rather exciting, but I get the feeling it is just Yahoo doing some wishful thinking again.

    In looking at their deal with Google, Fox Interactive signed a three year deal with MySpace in August 2006 for 900 million to be their search provider and to tie in their advertising. I wonder if that will have any impact on this deal?

  2. First, what is this last guy talking about? Socialize with people you know and pay attention to your own kids. This way, you don’t have to worry about any of the trash.

    Now, about the merger. In my opinion, I see a merge between Yahoo and MySpace as a further divergence to generation or preference. I may be biased here, because I do not use Yahoo. I just see a certain type of person using Google and a different type using Yahoo. I could be way off here, but to me this is leading right back to the Facebook/Google conversation. If this merger happens, I see the masses moving a-w-a-y from MySpace.

    There may be some good features and it will be interesting to watch it unfold, but I will not be convinced to give up all of my Google-ness.

    So, just in case, go join “The Limited Few” community on Facebook.

    Until next time…

    Keith Porterfield

    a Student of Sales

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