January 15, 2006 Interactive: dot con
 

Citizen Rupert Murdoch "Screws Up" MySpace

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"Are they trying to screw us"? is a favorite and frequent question Rupert Murdoch asks his acquisition and management teams during every investment or purchase negotiation according to a New York Times Magazine interview years ago. Media carpenters just learning their trade have claimed that Murdoch recently screwed up "MySpace" because--as of late December--MySpace users noticed that any reference to YouWho (YouTube)--the Do-It-Yourself video-sharing site/competitor--was "erased or blocked from appearing on MySpace". They were right, regardless of YouTube's official "simple mis-understanding" statement.

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Perhaps the mis-understanding though was on the part of YouTube's management; not understanding who they were dealing with. We will find out if YouTube becomes part of Murdoch's interactive suite, invested in at a fraction of its long-term worth. After buying MySpace in July, the answer to his favorite question regarding YouTube may have been an unequivocal "Yes". YouTube may have been screwing with him.

Those who think Murdoch's blue print and hands-on reconstruction plans for MySpace are over have a screw loose. Regardless of its valuable 45 million+ users, the only person who can truly claim it is "my space" is aussie wheeler-dealer, that people have been underestimating since he began his media career, beginning with two washed-up newspapers he inherited where he grew up in the down-under.

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Just because of the sore thumb he may or may not have inflicted on himself with YouTube, Murdoch's $580 million investment is a dream house. In fact, that was proven by the uproar of the YouTube scrape. Junior media Madison Avenue-types who began building their media training on Silicon Alley have little idea have a little bit more to learn.

Spending close to $600 million for a new property seems exhorbitant except when you consider that between 5-10 years from now, MySpace's extension to the News Corporation house will most likely be worth in the neighborhood of $6 billion or more.

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The New York Times reported on 1/2/06 in their "Lesson for Murdoch: Keep Bloggers Happy" article that when Citizen Murdoch's News Corporation began their ripping out any reference to YouTube and leaving an empty white space, this signaled that he was meddling, which made users angry. They further report that "the incident underlines the peril corporations face as they buy blogs and networking sites like MySpace".

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That may perhaps be true for other companies whose media empire is not run by one of the shrewdest media visionaries on the planet. One hundred years ago, Her Majesty's British aristocracy used to quip that the "sun never sets on the British Empire". Well, the same can be said for Murdoch's NewsCorporation empire today.

Having been in the states now just over 25 years, the Murdoch family has managed to dominate every aspect of the media business, like the Queen's Royal Navy once ruled the 7 seas. One of our closer TMAJ media partners once had the distinct pleasure of sitting just down the hall from Mr. Murdoch early in this person's career. Mr. Murdoch was one of the most curious and astute moguls who brought his tool belt to the Isle of Manhattan. He hasn't stopped building since. Based on his track record, interactive "housing starts" do not look like they will decline anytime soon.

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The Times and other media have suggested that because My Space's audience made such a big stink about YouTube's short term white whole in the wall indicated that MySpace's has a shaky hold on its audience. We believe it's just the opposite. How many people do you know who sells their home or property just when they settled into the local community, after getting their kids in the right schools, meeting people in various local community groups and joining organizations; just because some retailer on Main Street short-changed them? The idea that MySpace users would have valuable tool like YouTube taken away from them surely caused some community activism on the site. Though now that it's been restored, the momentary outage in video-sharing electricity will make people feel even more comfortable with their space on MySpace. They appreciate the neighborhood even more.

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We know that many wealthy people own more than one property. All the fuss about moving over to Friendster assumes that MySpace's heavy bloggers aren't there already!

Of all interactive properties, My Space is truly a "walled garden". It possesses the most sturdy frame and is the the most popular family in the neighborhood. Users love visiting their MySpace friends for hours. People love the people they meet in town and who wouldn't? Who isn't attracted to people who share their interests, their most attractive and personal self-image images/photos, their most intimate thoughts and emotions; where they lose themselves for hours, meeting/greeting the people, who are often just like them?

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What property isn't modeling themselves after My Space? Murdoch's suite of existing family division friends and his global vision will very soon be welcomed by MySpace's users. Judging by his ever-expanding piece of media property, every other media vehicle has learned to respect the most influential guy in town:

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Broadcast Television

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Cable Television

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Hollywood

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Power/Clout/Influence in Washington DC.

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Books

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Newspapers

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Satellite TV

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Magazines

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Other (This is where MySpace ranks)

Yes, we do believe that Rupert Murdoch screwed up with MySpace. He screwed it up on top of the roof. Where else does a Clever Rooster belong?

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