Nikki Finke reports on her Deadline Hollywood site that MySpace co-founders Chris DeWolfe and Tom Anderson are looking for a bunch more money from News Corp., which of course bought the social networking site a couple of years back for $580 million. Their contract is up in October, and they're proposing a two-year deal worth $25 million each - plus $15 million fund to invest in Internet companies. Finke quotes insiders as saying that the chances of DeWolfe and Anderson getting that much are slim to none (she has the News Corp. counter at $15 million each, plus equity in MySpace China, which seems like a pretty good deal). None of this is likely to see the public light of day (DeWolfe and Anderson are well down the News Corp. organizational chart and thus protected from SEC filing requirements). But if you believe the News Corp. hype, the pair's high asking price is not without cause. Here's a Forbes profile early this year:
Soon MySpace's ad salesmen will use software that sifts through its members' profile pages and sorts them based on the often piercingly personal information they pin up on their pages. Then they'll compile "buckets" of its members and offer them up to advertisers. Looking for married men who live in the U.S. and own dogs? Single women with college degrees who drive pickup trucks? For a fee, MySpace will deliver you directly to their cyber doorstep. Such mining has been a long-held marketing dream, and pulling it off would be a very big deal. But News Corp. Chief Executive Rupert Murdoch has a more urgent goal in mind: Help sell more advertising, at higher rates, and in the process turn MySpace and the rest of his Internet portfolio from a novelty into a cornerstone of his company. That heavy construction falls to Peter Levinsohn, president of Fox Interactive Media, and the founders of MySpace, Chris DeWolfe and Tom Anderson.
Whatever the cause, it is clear that Murdoch and Chernin have now invested a great deal of the company's future in DeWolfe and Anderson, who still run MySpace. They do so from the second floor of Fox Interactive's glass-and-steel complex in Beverly Hills. Their goal is to keep adding features and products that will keep their users on the site.