The only people I heard talking about Myspace before last week were dating industry executives busy pontificating that social networking will experience a popularity explosion as online dating has, only bigger.
How omnipotent of them. Things are certainly looking good at Myspace these days. If you remember, Intermix recently hired chief operating officer of Buy.com, Sherman Atkinson. Atkinson will take the same position at the Los Angeles-based online media and entertainment group. A clear sign they were getting their house in order.
This week, Myspace parent Intermix Media turned its star property into an independent subsidiary with fresh venture-capital backing.
Bambi Francisco, CBS.MarketWatch.com (reg. req’d):
The stock is up nearly 28 percent since the company was first profiled in this column Monday.
Intermix, which owns a number of Web properties that are expected to generate $70 million to $72 million in annual sales, announced Wednesday that Redpoint Ventures invested $4 million in the online media company. At today’s prices, Redpoint appears to have gotten a bargain at $4 a share. But again, Intermix traded below that level just last week.
Mark Pincus, who started Tribe Network:
MySpace could be worth about $50 million. That’s assuming the 3 million unique visitors go to the site 100 times, on average. That would be 300 million page views.If an advertiser pays $2 per CPM (cost per thousand), MySpace would get $600,000 per month or $7 million a year. Maybe that’s worth $50 million. Or the cost to someone else to get that audience at $20 per user might get $60 million.
Bill Martin, founder of Ragingbull.com:
Intermix is expected to generate about $70 million to $72 million for the fiscal year ending March 2005, up as much as 26 percent from this year. MySpace contributes very little of that revenue pie.MySpace may likely incur larger losses as it builds its business. Since Intermix will own a majority stake, it will still have to consolidate those losses on its books. Martin thinks MySpace can go to Wall Street and spin this tale: “They can explain that they have a core business that’s growing nicely, and say they have a venture investment [MySpace] with an outside investor. Intermix can separate the two.”
For investors who might get carried away, keep in mind that Intermix is barely profitable. The company said it expects to earn about $5 million to $6 million in fiscal 2005, ending in March. But much of that profit, or about $5.3 million, comes from the sale of an asset.
Bambi talked about MySpace last week, which we covered here.
