Looks Like Myspace Bit Off More Than It Could Chew

by Minority Fortune

myspacedeadMySpace has been falling out of relevance for sometime now. It’s too bad that MySpace hasn’t realized this and hasn’t tried to fight harder for market share. Furthermore, they’re holding onto empty assets and heavy liabilities that are costing them big bucks. It is reported by Globe and Mail that the company recently signed a twelve-year lease for $350 million in August 2008. Ambitious much?

MySpace is shelling out one million dollars a month in rent for an empty space in Los Angeles. They bought it initially because staffing was surging. That’s no longer the case since the company laid off almost forty percent of its workforce. They have been trying to sublease the space to no avail. It’s a bad situation.

The company should have been more ambitious in building its social media platform than landing the “the single biggest real-estate transaction in Los Angeles in the last 25 years” to quote Peter Levinsohn, the former president of News Corp (owners of MySpace). Congratulations. You’ve officially lost!

We’re curious to know if Sumner Redstone still regrets losing out on the bid to MySpace. He was so enraged by losing out on the bid that he fired the previous Viacom CEO Tom Freston. We’d also like to hear the rationale behind Tom’s decision to lay low on buying out MySpace. Perhaps he saw signs of the colossal ruins that would be MySpace in the coming years.

If there’s one lesson to learn here, it is to never get ahead of yourself. MySpace began to aggressively scale once it became large. They seemed to advance everything except their social platform. A static platform will not be favored for long. It rose to the top only to fall right back down. One has to plan ahead. With as much money as they had, they should have aggressively invested in research and development. Too bad it took a $350 million dollar lease for MySpace to realize this.

*Image courtesy of Edopter.
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