MySpace to Make $800 million+ in FY2008 | Hacker News Reader

MySpace to Make $800 million+ in FY2008

mashable.com

4 pointshoratio0510 comments

Now that MySpace is owned by MegaCorp, it feels like it has assumed the role of 'cash cow' in their product matrix. Not much innovation has come out of MS in awhile (some would argue ever). I may be a disaffected Gen-Y'er, but cmon now, it's fairly boring! Rupert will just squeeze it until every drop is coaxed out, and the only active users out of 20 Billion (or thereabouts) are Ronald McDonald and Cher.

This is rather interesting: $10 million on revenue of $550.

It's the more important number that everyone seems to be quickly glancing over.

Seems kind of lame to change your argument to be about profit because you were wrong about revenue...

What if MySpace is just reinvesting a lot right now. Or they're an incompetent non-technology company that doesn't know how to run things efficiently. There's no reason they couldn't be making a lot more profit. That's probably just not the main goal this early, although maybe it should be given the rise of Facebook.

> Or they're an incompetent non-technology company that doesn't know how to run things efficiently.

That's pretty clear from the way things at MySpace break all the time. It's also the reason I trust them more than Facebook.

My original argument was neither based on revenue nor profit, but stability. I used revenue to illustrate because I didn't know the profit margin.

If anything, the fact that mySpace is only profitable to the tune of 1.8% strengthens my argument. Sure, they may still be in a heavy investment phase, but I honestly expected a higher margin than that.

>There's no reason they couldn't be making a lot more profit.

No kidding, but if you and I think that, why aren't they?

MySpace's profit margin doesn't strengthen your argument at all and these revenues numbers hurt it significantly. These sites have huge value for the owners and that's backed up by very real numbers now.

> ...why aren't they?

Likely MySpace is much more interested in strengthening their position through reinvestment than trying to extract profits this early in the game. That's responsible and good business, even if they fail at it. Why does this surprise you?

The only numbers that are real is the $550M revenue for last year, and the $10M profit. The $800M forecast is exactly that, a guess.

Murdoch paid slightly over a year's revenues for mySpace. That's not a bad deal (actually it's pretty sweet if you think there is a long term chance of success), but that thin profit margin is really worrying.

What's more worrying is that mySpace was sold by people who thought that yearly revenue + $10M was a good deal. When even your basic deal starts at 3x yearly revenue, one wonders why they sold so low.

If mySpace is investing to the point of razor thin profit margins now, they must either really have something up their sleeves, or are not as healthy as thought.

People who know me know I'm usually the skeptical one about the long-term value of Facebook and MySpace. You have me beat by a long shot though ;-)

With the humor of Will Ferrel in Anchorman let's "Agree to disagree."

lol, sure.

Did you see this today on TC though... check out Woody's comment, #25. Interesting given the topic at hand, don't ya think?

Link: http://www.techcrunch.com/2007/08/09/wow-clown-co-got-that-1...

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