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MySpace Cost Murdoch Over $1 Billion

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You know what they say: You don't make 30 million friends without losing around $1.3 billion.

Poor Rupert. In 2005, News Corp. bought out MySpace for $580 million. And since then, users grew tired of flashing animating GIFs and auto-playing songs and vacated in droves to the (arguably) greener pastures of Facebook and Twitter. As iPhone and Android apps brought the latter two more widespread use, MySpace languished. Soon, it was left to be the rundown corner of the web -- a virtual city in disarray. It became the butt of jokes, replacing Friendster as the social media whipping boy for the latter half of the '00s.

But yesterday, it was announced that Specific Media bought the ailing site. For how much? $35 million.

Yes, the loss was massive, but according to Anders Bylund at Ars Technica, the operating loss amounted to much more than $500 million.

"So all things considered, MySpace has cost Murdoch's empire something like $1.3 billion," Bylund writes. "Even if my assumptions are way off, the final cost can't be less than $1 billion. That fiasco isn't putting Murdoch out of business: News Corp turned a $2.9 billion dollar profit in the last four quarters and generated $2.2 billion in free cash flow, for example. But it still stings as Murdoch's dreams of an end-to-end interactive media empire falls apart. And his shareholders have been trailing the broader market as well as rivals Viacom and Disney over those five painful years."

Strange, considering Murdoch's history with erecting paywalls and removing articles from Google News, it seems like he has his finger on the pulse of what online users want.

(See also: Google+ Can't Keep Up with "Insane Demand" and Facebook Beats Porn! Facebook Beats Porn!)

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