Myspace sold by Newscorp for $527M loss
Kara Swisher of All Things D reported today that Newscorp sold Myspace to Specific Media for $35M. Based on my back of the envelope NPV calculation that represents a loss for Newscorp of at least $527M. My assumptions:
- Newscorp acquired My Space for $580M in 2005
- P&L to Newscorp was neutral over its 6 year tenure (a big assumption)
- Cost of Capital 5%
In related news, Sean Parker on why Myspace failed and how it could have been what Facebook is today.