MySpace CoFounder Says Purchase Was A Scam

Jonathan writes "Brad Greenspan says he's the real founder of MySpace, not Tom, and the sale of MySpace to News Corp. was a criminal act. In a nine-chapter report, he describes how this was accomplished by hiding the value of the site from Intermix Media's shareholders." From the article: "How was News Corp able to turn $327 million into $20 billion or more of value within a year? The Myspace/Intermix transaction was so low compared to other internet transactions that it is raising eyebrows by analysts and media everywhere. Everyone seems to be asking how News Corp. got such a good deal. It seems too good to be true! After signing the transaction to buy Myspace & Intermix (but prior to the closing), News Corp. itself even showed how strangely little it had paid for Myspace by immediately paying $3.99 per monthly page view for slow growing comparable IGN. News Corp. paid only .03 cents per monthly page view for the hyper fast growing Myspace. Therefore, we can conclude that the fair value of Myspace was 100x or more what News Corp. paid! "

Sounds like sour grapes

[Scott Lockwood]

How can you illegally sell a company? Surely both parties had to agree, right? If I agree to sell you my house for $20, I can't come back later and claim fraud. How, if both Tom, and this guys company agreed to the sale, can it now be fraud?

Re:Sounds like sour grapes

[plantman-the-womb-st]

Funny how those such storys only came about *after* Murdock bought MySpace. Also funny how those those story *all* seem to originate on media sources also own by Murdock. And it's amazing how MySpaces web traffic has *skyrocketed* due to all the media attention.

Re:Minority rights

[jfengel]

Really? I was under the impression that corporate governance was a serious problem. Management has considerable authority to run shareholders meetings, and it's very difficult for even majority shareholders to remove members of the board of directors.

My source for a lot of this is an article from The Economist back in May (link [slashdot.org], but you'll probably have to pay to read it.) Basically, it says that although shareholders have considerable rights in theory, in practice the rules are set up to favor management. This is considered a good thing in some circles, who believe that professional management should trump non-expert shareholders, but in at least some cases it makes accountability difficult.

Re:News corp got ripped off...

[moochfish]

Myspace will ultimately be worth nothing. Myspace is already past the height of its popularity, its just coasting on momentum which will run out eventually.

Why does that get rated insightful? You might as well start claiming Yahoo hit its peak and is only coasting on momentum too. Look at the alexa [alexa.com] stats. I don't see any overall decline in myspace. It's had a solid year of growth. There's no way to conclude it's about to tumble into oblivion. In fact, the whole idea is that social networking IS about momentum -- once you have it, it's hard to lose it.

Re:News corp got ripped off...

[4D6963]

Myspace is already past the height of its popularity, its just coasting on momentum which will run out eventually

Can you please back that claim with.. anything? All I see is the ever increasing number of members on myspace, and now with the new multilangual versions of myspace it can only get worse. For example, hardly anyone knows MySpace in France, yet.. because so far it was all in english, but now the french section was launched just a few weeks ago..

Re:Sounds like sour grapes

[Anonymous Coward]

35-year-old men hooking up with 15-year-olds is ILLEGAL in the United States.

Nope. It's certainly illegal in most states, but not all. As far as some sort of federal statutory age limit, there isn't any. Does that blow your mind, or what?

Re:News corp got ripped off...

[Anonymous Coward]

http://losangeles.craigslist.org/wst/sof/215471263 .html [craigslist.org]

It could be worse for techies...

[NeoBeans]

Imagine if every time you successfully overclocked a CPU, Intel or AMD asked for more money! :-)

Re:Sounds like sour grapes

[khallow]

In addition there appears to be a significant difference. The two parties had agreed to sell the cow, but the defendants still had possession of the cow at the time they had discovered she was pregnant. That would be like agreeing to sell a company for X dollars, having it's price shoot up tremendously, and then backing out of the deal before it is completed. In this case, it sounds like the transaction occured well before the value as such of the company were discovered.