Maybe it's the soul-searching that comes when you are closer to the end of your career than the beginning. Maybe the weight of that whole phone-hacking scandal thing, which can't possibly end well for him, has put things into perspective. Maybe he just needs to stop all the ribbing he's been taking. But Rupert Murdoch, one of Twitter's newest media darlings, has unburdened himself on one of the worst bets of the post dot-com boom: News Corp's ill-fated purchase of MySpace.
"Many questions and jokes about My Space.simple answer - we screwed up in every way possible, learned lots of valuable expensive lessons," Murdoch tweeted from his iPad at the Consumer Electronics Show. It was a spare and concise analysis in keeping with the 140-character limit of Twitter, and one which nobody would dispute (though we all might dispute the extraneous space in his spelling of "My Space.")
News Corp bought MySpace for $580 million in 2005, a time when that social network was the dominant force in a still nascent space that Facebook had entered only a year before. Fast-forward to June 2011: News Corp dumps MySpace for pennies on the dollar to investors including Justin Timberlake, who in an unscriptable life-imitates-art moment portrayed Facebook co-owner Sean Parker in the hit film The Social Network. (More irony: Timberlake debuted MySpace TV at CES this week.)
The News Corp-MySpace tie-up is perhaps second only to AOL-Time Warner on the tech investment Wall of Shame. AOL's all-stock purchase of NetScape may ultimately have got them exactly nothing for their money, and Yahoo's multi-billion-dollar acquisition of broadcast.com may also look ridiculous in retrospect. But in fairness to Murdoch (and AOL and Yahoo), there is no shame in putting down big money for a company which, at the time, seems like the Big Dog as a way of accelerating your way into a fast-moving market which only seems to be going up. This is especially true when, as was the case with AOL and Yahoo, you're using a hyper-inflated valuation of your own company to buy a hyper-inflated property (analogies to the housing boom purely coincidental).
"Buy, don't build" can be a sound strategy, and MySpace was even arguably the market leader until 2008. Murdoch's initial instinct was correct — even though the execution was awful — and it's good that a total disaster like MySpace didn't make him gun-shy about his not-quite-as-big best last year on The Daily.
And, finally, it's never a bad thing when you fall completely on your sword. It's a real Martha Stewart move. And going forward, the joke's probably on anyone who thinks there's any more comedy to mine in this story.
(PS: I'll be talking about this on "Quest Means Business" at 2:15 ET today (Friday).
