For Sale: Barely Used Social Networking Site
-- News Corp. is ready to sell struggling social network Myspace, chief operating officer Chase Carey said in Tuesday's earnings call. Less than a month after Myspace laid off 500 staffers, Carey said "now is the right time" to find a new owner for the site.
During the last quarter, News Corp. lowered by $168 million the goodwill of its Digital Media Group as a result of lower-than-expected earnings and cash flows. Put another way, Myspace is not worth what News Corp. thought it was worth. Among the digital media properties overseen by its Digital Media Group are Myspace, IGN and Fox Audience Network. The group used to include Fox Mobile Group, which was sold to a European investment group at a $28 million loss in December 2010.
News Corp. posted revenue of $8.76 billion in the quarter ended December 31, 2010, up slightly from the $8.68 billion in the prior year quarter. Net income rose 138% to $675 million from $284 million. The Digital Media Group's revenue is such a small part of News Corp.'s business (which includes cable network programming, filmed entertainment and television divisions) that it falls under the "other" category. Revenue in the "other" category dropped to $319 million from $447 million in the prior year quarter.
( USA Today, SEC filing)
Borders On The Border of Bankruptcy
-- National chain Borders is on the verge of filing for bankruptcy. Media reports claim the struggling retailer may file for Chapter 11 bankruptcy reorganization within weeks and close 150 stores. On Sunday Borders said it would delay payments to vendors in order to save cash. Although it once enjoyed far more prominence in music, Border now accounts for a percent or two of the U.S. recorded music market.
Verizon's iPhone Welcome Mat: Data Reduction
-- Before the iPhone hits the Verizon network, Verizon is beginning to reduce the data-throughput speeds of the 5% of its subscribers who account for the most traffic. At the same time, Verizon is implementing "optimization and transcoding technologies" to transmit files in a more data-efficient manner.
( Boy Genius Report)
Live Nation - AEG Competition Is Good For Business
-- The day after news broke that AEG is partnering with Outbox Technologies to sell tickets at 105 venues, the market didn't exactly believe it was horrible news for Live Nation. Shares of Live Nation were down 2.4% in midday trading. The Wall Street Journal article that broke the story contained an estimate that events owned or managed by AEG account for "as many as 10 million of the 140 million tickets that go through Ticketmaster's system annually."
In any case, the ticketing marketplace just got even more interesting. There has already been a fair amount of investment in the lower and middle end of the market - companies like Eventbrite, TicketFly and TicketBiscuit have raised millions and are seeking to transform the ticketing process for small and mid-sized venues. Now, Outbox Enterprises, a joint venture between AEG and Outbox Technology (where former Ticketmaster chief executive Fred Rosen is the CEO), is targeting the upper end of the market.
One has to wonder what would be happening in the ticketing market if Live Nation had not merged with Ticketmaster. In the opinion of Jonathan Knee, author of "Curse of the Mogul: What's Wrong With the World's Leading Media Companies," the merger created competition that would not have otherwise existed. "Foolishly, rather than figuring out a mutually beneficial arrangement between them, they did what moguls frequently do, which is flex their muscles and create a new competitor," he told me in a Q&A last year Later he added, "Cooperation-legal cooperation-is a good strategy for creating value." (subscription required).