I have a hard time imagining it, but the folks that have reanimated the zombie social network, MySpace, are hoping for yet another pivot. Last summer, News Corp sold MySpace to a group of investors for $35M after buying it for $580M a few years earlier and pouring who knows how much into it along the way. MySpace’s owners want to pivot into a Pandora/Spotify music service.
LEAKED: MySpace’s Master Plan To Raise $50 Million And Relaunch As A Spotify Killer - Nicholas Carlson via Business Insider
Since December 2011, MySpace traffic is up 36 percent.
But MySpace continues to flounder commercially. Documents show that it will generate revenues of just $15 million this year, up from a miserable $9 million in 2011. MySpace lost more than $40 million in 2012. Interactive Media expects it to lose another $25 million next year.
Meanwhile, Interactive’s other big property, Specific Media, took a hit as ad buyers turned to real-time bidding solutions over traditional ad networks. Revenues declined from $42 million in 2011 to a projected $35 million in 2012 — both down from a high of $60 million in 2010.
Now, Interactive Media holdings is out looking for another $50 million in funding.
In pitch materials dated from November 16, 2012, Interactive says it plans to use most of the money to re-launch MySpace as an alternative to Pandora and Spotify. Of the $50 million, $10 million will go to marketing, $15–$25 million will go to licensing deals with the music labels, and another $15 to $25 million will be reserved for “general working capital.”
Interactive says it plans to launch a music subscription business for mobile in the second quarter of 2013.
Somehow, despite all the losses, I have the feeling these folks will get the cash to make this latest effort. There is a lot of dumb money out there.