MySpace.com Acquisition is a VC Train Wreck

Oh my, but the MySpace.com acquisition for more than half-a-billion dollars is going to cause a VC-driven content train wreck. We already had startups falling out of trees making MySpace comparisons, now they’re going to be thick on the ground, with the “MySpace of X” and the “MySpace of Y”, and the “MySpace crossed with Google”, etc. etc. I shudder to think how many VCs will fund MySpace-alikes through a thought process like the following:

I shouldn’t fund this piece of crap. No revenue. No protection. No nothing …But wait, I would have said the same thing about MySpace if someone had brought it to me. No nothing there, and they got bought for more than half a billion. How silly would I look if this stupid startup turned into another MySpace?  …Maybe it could be another MySpace. Maybe I should just put a few million into it. Can’t lose more than I put in. … Hmmm, let’s put a term sheet for this thing on the agenda for the next Monday-morning meeting.

More seriously, this is a remarkable event for user-created content. After all, according to Neilsen/Netratings, MySpace served up more ad pages in May than every online site other than Microsoft and Yahoo. That is fabulous stuff, and it will feed a fervor for more of same — most of which, of course, will fail, but that’s okay.

Related posts:

  1. The Declining Cost of Customer Acquisition
  2. VC Fund Misses Money Target

Comments

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  2. John Furrier says:

    Paul,
    Come on Train Wreck…Give me a break.
    Hey it’s a comparable and that’s all that it is. User generated content is here and there will be a mass of new ventures to capitalize on it. VCs will have to do there job and figure out the good ones…
    John Furrier
    Founder, PodTech.net
    YES a user generated content company :-)

  3. SiliconBeat says:

    Web 2.0 peak? MySpace sells for $580 million

    Updated MySpace, of Los Angeles, has long been considered the hottest of the new generation of social networking companies. The New York Times reports: The News Corporation, making one of its largest bets on the Internet, announced today that it is pay…

  4. TechTrader says:

    You got it right. See my post at TechTrader.blogspot.com for my even more contrarian thoughts about the MySpace deal. I think News Corp got snookered.

  5. SiliconBeat says:

    Web 2.0 peak? MySpace sells for $580 million

    Updated MySpace, of Los Angeles, has long been considered the hottest of the new generation of social networking companies. The New York Times reports: The News Corporation, making one of its largest bets on the Internet, announced today that it is pay…

  6. SiliconBeat says:

    Web 2.0 peak? MySpace sells for $580 million

    Updated MySpace, of Los Angeles, has long been considered the hottest of the new generation of social networking companies. The New York Times reports: The News Corporation, making one of its largest bets on the Internet, announced today that it is pay…

  7. TechCrunch says:

    Web 2.0 This Week (July 17 – 23)

    It’s been a helluva week. Myspace got bought for over half a billion dollars. Podcasting died (but not really), and an important development in beer tapping technology was announced. Oh yeah, we spent the week at Always On and learned a lot ab…

  8. Robert says:

    Well I just wanted to inform you that I may have come accross a similar venture to myspace and has potential in other demographic areas..
    I will inform you upon request but time is critical this new website is generating radio and television sponsors as we speak.