Buy MySpace for $580 Million, Sell it for $35 Million

News Corp paid $580 million dollars for MySpace in 2005 and just six short years later it is dumping the nearly useless property for $35 million to a group of investors who believe they can salvage the site.

This is a great example of what not to do with social media, and I really feel it will be repeated over and over again in the coming years. Mature, stodgy companies trying to stay “tech-forward” by purchasing up and coming sites. Think of Time Warner and AOL. That was a disaster. Now News Corp and MySpace. The bottom line is that these sites (social media) are fad-based phenomena that have very little long term customer loyalty (Friendster anyone?) So, when the next site comes along (and one will), sites like MySpace will lose favor.

Now, MySpace had the potential to make a lot of money over the past few years. It sold lots of ads… but ultimately it was done in by the very people who made it successful – teens.

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