While sitting around at Pubcon chewing the fat ( a marvelous Rib Eye) with a couple of very, very smart people who shall remain nameless, the subject of the emerging war between Apple and Google came up. Specifically, we were discussing the one box music search and the notable absense of iTunes from the choices for to buy digital content from Google’s new music player in the SERP.
After we agreed that cloud based DRM has certain advantages for users and lamented that Apple was unlikely to counter by licensing iTunes for Palm, Droid, RIM or Symbian (too bad because it would be a pretty shrewd move to counter Google and put a lot of pressure on everyone to make DRM purchases portable across platform), we got to discussing monetization of the OneBox and what a slippery slope that represesented.
Ultimately the conversation turned to MySpace and how it was trying to find its way back to its “roots” as a community for music and bands. Suddenly, it struck me that Apple needs to buy MySpace. Before you say I am crazy, hear me out:
- NewsCorp is getting hammered lately and bleeding cash, including over $1 million/month in vacant office space for MySpace alone. Selling MySpace certainly wouldn’t get anything like the $15 billion dollar valuation that was once being bandied about, but even $2.5 billion would be a nice cash infusion along with a huge profit versus the $580 million acquisition price.
- Apple has something like $35 billion in the bank and billions more coming in every quarter. There are not a lot of attractive acquisitions for Apple that really provide “synergy”, they aren’t likely to start paying a dividend and they have no reason to consider a huge stock buy back. Apple has never made major acquisition and frankly it isn’t clear what technology company they would want to buy except perhaps Garmin or some other source of turn-by-turn data to counter Google. All that cash is just balance sheet bling.
- MySpace has lost its mojo and is in desperate need of being cool, hip and relevant again. Apple would immediately polish that turd and erase the stench from the idea that Fox New and MySpace are owned by the same company, a definite issue for many hipsters and “Hollywood Elites”
- Integrating with iTunes would instantly make all that music content, fan data and miscellaneous comments relevant, compelling and even VALUABLE and possibly even generate revenue by connecting directly to iTunes titles.
- The worst kept secret in the valley is that Apple is trying to become a player in streaming media to compete with the cable companies and possibly YouTube in the battle for the living room. MySpace is well connected in Hollywood and could provide many of the same synergies for iTunes play to move from the laptop to the living room.
- Apple is known for amazing industrial design, clean, intuitive user interface and MySpace… uhm… MySpace could use some of that.
- MySpace is heavily invested in geo, so it has a nice foundation for a local play and provides some synergies for potential iPhone GPS based services that are currently powered by Google.
- Finally, MySpace is STILL a fairly major online destination. Convert iTunes visitors into web traffic and the combined entity is suddenly one of the top 5 web destinations with an enormous user base which is large enough to slug it out with the other platform players. Short of making a play for Yahoo, MySpace is the only property that could allow Apple to jump off the sidelines and compete on the social front.
If anyone at Apple is listening, now is the time to act, before MySpace either finds its way or becomes irrelevant. You may not be able to get into the Google OneBox, but if you play your cards right you could dominate the organic results for music, television and movies and bring users right to your door. And if you do decide to go for it, just send me 1% for putting the deal together.
MySpace CEO Owen Van Natta was unceremoniously fired last week after MySpace fell $32 million short of quarterly targets amid rumors on tension among the 3 top executives alone with some micromanagement from above, aka John Miller, head of News Corps Digital division. Add another round of layoffs since November and MySpace is probably available for a song… or 1.55 billion songs @1.29/each in a deal which does not officially disclose the purchase price.