News Corp. Not Having Fun with MySpace

And here's an article at Seeking Alpha about the impact MySpace can have on News Corp.'s stock. The thesis is that it may not be worth the effort to rejuvenate the asset since its effect on the shares may be minimal.

That's quite interesting, actually. It makes you wonder why News Corp. is even bothering with MySpace. Well, that's exaggeration, I suppose. The media company obviously has to invest some time and resources into the domain. For one thing, it's still in the portfolio. For another, MySpace does possess synergistic value in relation to the rest of the business, especially on a promotional level for content.

This should serve as a lesson for every exec out there that panics when a potential Internet fad seems to be the wave of the future: do your best to ignore it. If you must do something with the fad, strike a short-term partnership. It's simply too difficult to say exactly what the future will look like for the web. I oftentimes think of Club Penguin and Disney (DIS): will that acquisition end up not appearing so prescient years from now? Would the money have been better spent elsewhere?

News Corp.'s best bet would be to do what it can with MySpace and then eventually get rid of it. I just don't perceive it as being a great long-term investment. Sure, the zeitgeist might rediscover the site at some point, but waiting for the cultural pendulum to swing back might require too high a quantity of patience. News Corp. has so much other stuff going for it that it probably would be wise to focus on stronger elements.

Disclosure: I own Disney; positions can change without notice.