Friday, July 21, 2006

Google and MySpace: Woulda, Coulda, Shoulda!!

In the latest (July) issue of Wired magazine, Rupert Murdoch claims that Google……could have bought MySpace three months before we did for half the price.

They thought, ‘It’s nothing special. We can do that.’”

So that means Google could have acquired MySpace a year ago for about $290 million.

Talk about a strategic blunder… the thought of Google and MySpace, combined, boggles the mind.

Instead, Google is left thinking of what could have been.

And to add insult to injury, it may turn out that not acquiring MySpace may end up being more expensive for Google!

As widely reported, MySpace is now the largest source of search traffic for Google, accounting for over 8% of their inbound traffic as of early May.

That essentially means that MySpace is responsible for about $400 million of Google’s annual revenues.

Knowing this, MySpace is trying to capitalize by holding an auction for its search business. If Google wins, it will end up sharing a significant percentage of that $400 million with MySpace… John Battelle thinks the split to MySpace will be close to 90%. And Google would need to pay it every year.

Needless to say, had Google acquired MySpace, no such payments would have to be made.

For more on this article, click below link

[Article Coutesy : Robert Young]

Now for some personal comments...

Yeah... in all management perspectives... it does seem and in fact may be a strategic blunder..

But for all big corporations, just like in politics, it is imperative to have a strong "so-called opposition" for their survival so as to retain their position..

Now, this is something most corporates or even politicians can afford, because if they slip.. they are history

When you can pay someone to retain their current position, don't you think that this is a small investment..

As they say, once you know your enemy, it is better to treat him as your friend... [not that they are enemies, but in this case it is the competiiotion]

Well.. who knows... it is too big for us to comprehend !!

1 comment:

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