Analyst: MySpace Value Could Reach $15 Billion
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MySpace, the social networking Web site, could be worth around $15 billion within three years, measured in terms of the value created for shareholders of parent company News Corp. (NWS), 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 that "media investors may not fully appreciate what has already been done with MySpace or what may lie ahead."
"$15 billion in a few years? It is possible," Rohan wrote in a research note to clients.
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MySpace was acquired by Rupert Murdoch's News Corp. for $580 million less than a year ago. It now boasts more than 90 million active users.
Rohan said MySpace could demonstrate a value of between $10 billion and $20 billion 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.
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Rohan based his view on an extrapolation of estimates for the value of Internet properties ranging from $1 billion for both MySpace rivals YouTube and Facebook to the market capitalization of $120 billion for Google Inc. (GOOG).
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 $35-40 on MySpace, he said.
MySpace management believes its video service ranks No. 3 among U.S. Web users behind Yahoo Inc. (YHOO) and YouTube, Rohan said following the Tuesday meeting with Fox officials.
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Britain is adding 25,000 MySpace member profiles per day. Australia has 2 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 U.S. carrier, he said.
Editor's Note: News Corp. is the parent company of FOX News, which operates FOXNews.com.