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MySpace heading for $15bn market value?
Murdoch's monster start-up has "massive" appeal, says analyst...

By Reuters

Published: Thursday 28 September 2006

MySpace, the social-networking website, could be worth around $15bn within three years, measured in terms of the value created for shareholders of parent company News Corp, a Wall Street media analyst forecast on Wednesday.

RBC Capital analyst Jordan Rohan said he had come away from a meeting with Fox Interactive, the managers of MySpace, believing "media investors may not fully appreciate what has already been done with MySpace or what may lie ahead".

Rohan wrote in a research note to clients: "$15bn in a few years? It is possible."

MySpace was acquired by Rupert Murdoch's News Corp for $580m less than a year ago. It now boasts more than 90 million active users.

Rohan said MySpace could demonstrate a value of between $10bn and $20bn within a few years. Acknowledging he was making an "audacious claim" he justified the forecast on the basis of MySpace's "raw, unprecedented user/usage growth".

He also said the site's "massive" international appeal, capacity to become "an intellectual property distribution powerhouse" and experienced management team lent credibility to his prediction.

Rohan based his view on an extrapolation of estimates for the value of internet properties ranging from $1bn for both MySpace rivals Facebook and YouTube to the market capitalisation of $120bn for Google.

He said MySpace was currently sold out of space for video advertising. The CPM, or price per thousand ad views, on a premium show such as Fox's The Simpsons runs as high as $35 to $40 on MySpace, he said.

MySpace management believes its video service ranks number three among US web users behind Yahoo! and YouTube, Rohan said following the Tuesday meeting with Fox officials.

The UK is adding 25,000 MySpace member profiles per day. Australia has two million unique users. MySpace France began public testing three weeks ago, he noted.

MySpace is internally developing a MySpace web application to run on mobile phones that should be launched in three to four months with a major US carrier, he said.