Wednesday, April 13, 2011

MySpace: It's not only Murdoch's newspapers that makes stuff up

Obviously, as Rupert Murdoch attempts to drag whatever money he can out of the MySpace storm drain, there's going to be a certain level of positive thinking put on the pitch. But now that Techcrunch has seen how far the brave face is being put on, the mystery is why they don't go the whole hog and try and pretend to a hapless tourist/businessman that they're going to sell them Facebook:

After 2011 the pitch book turns to pure fiction. After losing $165 million this year, they expect to actually have $15 million in ebitda in fiscal 2012. How? Revenue will decrease to $84 million, but expenses will fall from $274 million this year to just $69 million. The company will then be profitable, says the pitch book.

That means about $205 million would need to be found in operating cost savings in the next 14 months. That means even more massive layoffs. And yet somehow News Corp. argues that revenue will only fall 23% in the next year. Costs will decrease 75%, and revenue will fall just 23%.

Believable? Nope. But at least on paper it makes MySpace profitable.
I'm sure they've got some solid evidence to back this up, though. Perhaps it's "a pal of Rupert Murdoch says". Or simply "a source".