A 2006 buyout agreement of Myspace by Google listed the terms of keeping a minimal amount of traffic for a certain period of time before a $900 million buyout would be executed. However, recent traffic declines on Myspace have put the deal in jeopardy.
Weaker traffic means the News Corp division is now expected to receive about $100m less from a deal that had underpinned investors’ confidence in the MySpace acquisition, executives revealed.
Myspace still claims that they are hanging on and have a strategy to increase traffic before the buyout is fully executed, but investors still have yet to see it. Myspace's low traffic and ad sales decline is the bane on News Corps otherwise successful fiscal quarter. This may explain why they are trying to get rid of it.
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3 comments:
Sounds like a really bad deal for Google.I believe this agreement was signed(2006) before the recession and before the Facebook/Twitter boom.
Sounds like a really bad deal for Google.I believe this agreement was signed(2006) before the recession and before the Facebook/Twitter boom.
I think this is a huge risk for Google. How can Myspace promise these strategies to increase traffic will work? I predict, with the rate Myspace is going, Google will regret their decision and be out $900 million.
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