As NewsCorp continues its search for a buyer of the struggling Myspace social networking service, we're going to hear about several "interesting" conversations it has with potential partners.
The latest, according to Bloomberg, is that NewsCorp approached online music video service Vevo with a proposal to swap Myspace for a stake in a Vevo joint venture.
Now these are just talks, and while both sides aren't commenting, our sources say that the likelihood of such a move occurring is rather remote. But let's explore the possibilities:
- One of Myspace's most valuable asset is Myspace Music, a joint venture between Myspace and the major record labels. Vevo is a joint venture between two of the major record labels-Universal Music Group and Sony Music Entertainment-and Abu Dhabi Media. At first blush, two joint ventures with similar ownership structures could make for an easy blend. But then consider Warner Music Group, a member of the Myspace Music JV that has absolutely no interest in participating in the Vevo JV. I can't see the folks at Warner going along with such a move.
- Myspace Music offers more advanced profile pages to bands, lets fans stream songs (video or otherwise) in full, offers concert ticket sales and so on. Vevo could benefit from adding much of that functionality into its service. But Vevo is laser focused on monetizing music video and has shown no interest in getting into the streaming audio game. Maybe operating two separate sites (Vevo and Myspace Music) and integrating them more deeply may make some strategic sense, but with Vevo on the rise and Myspace on the decline it's difficult to see why Vevo would want a potential drag on its momentum.
- I've said it before and I'll say it again, my money is on a private equity group buying the company for a song and then either operating it as solely a music service or switching gears and focusing on social gaming.
Overall, the Vevo talks make a whole lot more sense than the Mocospace nonsense we heard about last month, but that doesn't make it any more likely.