Dragons in the Yahoo-MySpace Talks

The rumor, as yet unconfirmed, yesterday and today has centered around the possibility that NewsCorp/Fox Interactive is in talks with Yahoo to trade off MySpace in exchange for a 30% stake in the Yahoo Corporation. Given that that would value MySpace at approx $15B, the big winner would be Rupert Murdoch who bought MySpace 2 years ago for $580M.

Raw numbers aside, let’s look at what this deal could potentially do if it were to happen.

  • MySpace video would in the short term still favor Google’s YouTube, however ease of use restrictions will be lifted for Jumpcut videos.
  • Integrate Flickr photo sharing into MySpace and implement Facebook-style tagging of photos
  • Manage Yahoo! Fantasy Sports teams from within MySpace and display results.
  • Manage rights and buy/sell of Yahoo! Music from MySpace and in conjunction with MySpace artists
  • Eliminate Yahoo! 360
  • Allow sharing of MySpace modules to My Yahoo!
  • MySpace messaging via modified Yahoo! Mail
  • Premium MySpace content for folks looking to “hook up” in conjunction with Yahoo! Messenger and Yahoo! Personals
  • Integrated Yahoo! Search in MySpace
  • Integrate MyBlogLog into MySpace to enhance the “Friends” experience
  • Turn the Yahoo! Developers Network Loose on improving MySpace modules and user experience
  • Yahoo turns over 30% of its companies, possibly requiring shareholder approval
  • Increase Yahoo’s News reach via NewsCorp 28 newspapers, 27 of which are not in the United States and enhance other services via NewsCorp’s empire of organizations.

At the end of the day, if the deal happens and if Yahoo! executes well on and fires on every cylinder and if NewsCorp brought internet street smarts to the table (which is no slam dunk), this deal could be a very strong move for both companies. If not, someone is going to look very silly.