3 ms·

The Bleak Financial Numbers From The MySpace Sale Pitch Book

20 points by thankuz 16y ago

vessenes 16y ago
How hard would it really be to re-implement MySpace? I keep thinking three or four focused coders could duplicate the major needed functionality pretty quickly with today's web technology stack. I ask that because I am wondering what the $250mm in run-rate expenses is for; the article scoffs at cutting so much out of G&A next year, and that may well be impossible, but it's hard for me to understand why Myspace needs even $100mm a year in opex when reddit (which is, admittedly, 1/10 or less the traffic) has been functioning with 2 - 4 person tech team. Anyone?
- vessenes 16y ago
  p.s. I like this as a Private Equity play -- buy myspace for cheap, and "Facebookize" the design and concepts while your crack team of coders re-writes the entire infrastructure. Voila -- the world's only credible Facebook competitor, newly lean and mean. Now who do we know who's willing to lay off pretty much all of Myspace??
  - petervandijck 16y ago
    Cutting MySpace back to the core and starting from scratch would be awesome. Few people have that much money and such big balls though. And the teams (tech) that could pull it off have better opportunities. I do think it could work. Not everyone loves Facebook.
- vnorby 16y ago
  I work at Myspace (but I do not speak for the company). I'm not really privy to all the information in the world here just being an engineer, but I do know that it was really expensive to lay off everyone in January, and they've definitely reduced expenses A LOT. In the past year, we've gone through multiple reductions in size. It might not add up to the figures they're mentioning in the article (I guess more layoffs coming?), but I do think they've probably cut more than 60% off of the $250mm already. EDIT: I can also sympathize with the idea that you can run myspace with just a couple people. It would definitely require a holistic, new vision for the site though, as the current site is quite complex and has a lot of moving parts, where the knowledge of how those work is contained within separate units of the company.
  - vessenes 16y ago
    Yes, totally interesting. Thanks for posting! I had a good chat about this today in the office; on the one hand, it's insanely daunting to imagine how you'd actually trim it down. On the other hand, myspace's social graph, especially around entertainment is arguably the only valuable thing at the company right now. As a thought experiment, I asked "What if color.com owned myspace's traffic and social graph?" My answer is that color.com would be worth much more than the $250mm TC seems to think Myspace will sell for. Of course, that's an inflammatory company to pick, but choose your own social company. What about groupon, or what if Microsoft injected myspace into the Live community somehow? All the moving parts / separate units are probably not adding much value right now, unfortunately. Since I haven't used myspace in many years I have no real domain knowledge here, though. And, I browsed it for a while today after thinking about this, and agree -- the site is huge, and complex, and as I recalled a nightmare of horrible personal design and usability. On the plus side, Bieber looked totally awesome.
- stillatmyspace 16y ago
  Keep in mind that most of that 2011 loss is probably comprised of one-time write downs. Imagine a company where everything was scaled to the roof in 2009 and two years later it's 33% of the peak. You have to downsize contracts, dispose of hardware, lay off people, etc. In many cases you're buying out of a bad situation. Couple that with the fact that Myspace is a small division in News (think Fox) and these accountants are experts in fiddling with the books to move losses around (think movie studio accounting).

20 points by thankuz 16y ago

How hard would it really be to re-implement MySpace? I keep thinking three or four focused coders could duplicate the major needed functionality pretty quickly with today's web technology stack. I ask that because I am wondering what the $250mm in run-rate expenses is for; the article scoffs at cutting so much out of G&A next year, and that may well be impossible, but it's hard for me to understand why Myspace needs even $100mm a year in opex when reddit (which is, admittedly, 1/10 or less the traffic) has been functioning with 2 - 4 person tech team. Anyone?

vessenes 16y ago
p.s. I like this as a Private Equity play -- buy myspace for cheap, and "Facebookize" the design and concepts while your crack team of coders re-writes the entire infrastructure. Voila -- the world's only credible Facebook competitor, newly lean and mean. Now who do we know who's willing to lay off pretty much all of Myspace??
- petervandijck 16y ago
  Cutting MySpace back to the core and starting from scratch would be awesome. Few people have that much money and such big balls though. And the teams (tech) that could pull it off have better opportunities. I do think it could work. Not everyone loves Facebook.
vnorby 16y ago
I work at Myspace (but I do not speak for the company). I'm not really privy to all the information in the world here just being an engineer, but I do know that it was really expensive to lay off everyone in January, and they've definitely reduced expenses A LOT. In the past year, we've gone through multiple reductions in size. It might not add up to the figures they're mentioning in the article (I guess more layoffs coming?), but I do think they've probably cut more than 60% off of the $250mm already. EDIT: I can also sympathize with the idea that you can run myspace with just a couple people. It would definitely require a holistic, new vision for the site though, as the current site is quite complex and has a lot of moving parts, where the knowledge of how those work is contained within separate units of the company.
- vessenes 16y ago
  Yes, totally interesting. Thanks for posting! I had a good chat about this today in the office; on the one hand, it's insanely daunting to imagine how you'd actually trim it down. On the other hand, myspace's social graph, especially around entertainment is arguably the only valuable thing at the company right now. As a thought experiment, I asked "What if color.com owned myspace's traffic and social graph?" My answer is that color.com would be worth much more than the $250mm TC seems to think Myspace will sell for. Of course, that's an inflammatory company to pick, but choose your own social company. What about groupon, or what if Microsoft injected myspace into the Live community somehow? All the moving parts / separate units are probably not adding much value right now, unfortunately. Since I haven't used myspace in many years I have no real domain knowledge here, though. And, I browsed it for a while today after thinking about this, and agree -- the site is huge, and complex, and as I recalled a nightmare of horrible personal design and usability. On the plus side, Bieber looked totally awesome.
stillatmyspace 16y ago
Keep in mind that most of that 2011 loss is probably comprised of one-time write downs. Imagine a company where everything was scaled to the roof in 2009 and two years later it's 33% of the peak. You have to downsize contracts, dispose of hardware, lay off people, etc. In many cases you're buying out of a bad situation. Couple that with the fact that Myspace is a small division in News (think Fox) and these accountants are experts in fiddling with the books to move losses around (think movie studio accounting).