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September 26, 2005
Murdoch MySpace Deal Going Pear-Shaped?
Posted by Dana Blankenhorn
Regular readers here will recall how I called Rupert Murdoch's deal to buy the owner of MySpace, well, ill-advised.
It may be worse than that. The company now finds itself fighting a rear-guard action by former CEO Brad Greenspan, who wants to buy a controlling interest for more than Murdoch's paying.
But it doesn't stop there. Greenspan is also making some serious charges against Intermix management in his Web site on the deal, Intermixedup. He charges, among other things, insider trading the price-kiting, essentially saying they used pump-and-dump tactics.
Despite all this chicanery, Greenspan charges that MySpace is worth far more than Murdoch is paying, and he could get a better price. Which leads to some questions:
- If Intermix management is getting out one step ahead of the stock cops, what did Murdoch pay $580 million for?
- If Greenspan knew Intermix was crooked, why does he think it is at the same time underalued?
- Is all this going to blow up in Murdoch's face before he even gets his hands on it?
It seems pretty obvious to me that Murdoch's people did not do ample due-diligence on this deal. What else have they screwed-up on? And if they got this wrong, can you really depend on them to execute on any grand Internet strategy?
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jesse Kopelman on September 26, 2005 07:57 PM writes...
While Murdoch's attempts to move into the 21st Century may fail, he has to do them. The media empire he's built is living on borrowed time. He's got to do something and what he's done so far seems like a decent start to me.
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