MPG & Media Contacts: Hey Amazon: Buy MySpace Now (with 1-click®) - Adam Kasper - MediaBizBloggers

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In News Corp's earnings call last week, COO Chase Carey called their MySpace unit out as a "problem." In looking at MySpace's declining revenues and traffic, one would have to agree. However, MySpace still remains a relevant destination for their core demo and offers great value to bands, record labels, and studios as well as the core demos it serves. MySpace has acknowledged this much as just last week the site rolled out a new look, logo and proclaimed its rededication to the 12-17 demo and their entertainment related passions.

Since the earnings call, speculation that News Corp. would sell or even shut the site down has ensued. This speculation was fueled by additional comments Carey made indicating a decision on MySpace's future would be made "in quarters, not years."

Suffice to say, the selling price for MySpace would be a fraction of the $580MM News Corp. paid for the site in 2005. Its advertising revenue is falling rapidly going from $470MM in 2009 to $347MM this year and down to $297MM in 2011 according to eMarketer projections. Traffic is falling as well, breaking 60MM monthly users (the wrong way) in August of this year based on comScore's September data. Time will tell if the new look and focus on content will stem or reverse these trends but all of the above certainly positions MySpace as a potential acquisition target.

But who would buy them?

Here's my idea: Amazon.

Why would the world's largest online retailer want to take ownership of a dying social network with falling revenues and a shrinking user base, you ask? Let me tell you. Amazon can use MySpace to take its digital content sales offering to a new level and truly compete with Apple's iTunes store for share of mind and market. Think about it. MySpace has a dedicated young audience, is still a key launching pad for all things entertainment but relies on marketing dollars for its revenue. A fine model of course, but with a diminishing user base and a somewhat has-been image, not necessarily a long-term strategy for success. MySpace is mainly about content discovery and enjoyment, but it currently does not have the capability to close the purchase loop and forces users to go elsewhere to own the content they want to own. By allowing users to purchase digital entertainment content directly from the site, MySpace + Amazon would greatly improve the user experience and take share from Apple, something just about everyone from Amazon to Microsoft to Google to Samsung is intent on trying to do these days.

A deal like this also supports Amazon's long-term goal of remaining the world's most dominant online retailer in that it brings in a new and underrepresented demo to their user-base; namely MySpace's core demo. According to comScore, Amazon over-indexes on all key advertising demos that are mainly comprised of Adults 18+ (AD1849, AD25-54, etc.) but under-indexes against teens and tweens (P9-14, P12-17). Granted some of this can be attributed to teens and tweens having limited disposable income, but as such they have not yet developed brand loyalty to an ecommerce provider, thus making them an audience quite worth of investment.

Additionally, a solution such as this would greatly benefit both parties in their efforts in the mobile space. By integrating MySpace content into the Amazon MP3 for Android app, Amazon would create an even deeper relationship with the highly mobile teen audience and potentially do something even Apple has not been able to do (sorry Ping): create lasting digital social connections through digital entertainment purchases.

To out it simply, Amazon needs to grow its digital download business, MySpace needs a big boost in traffic and revenue, News Corp. needs a solution for the financial black hole that MySpace has become for them and consumers need more widely distributed choice for buying digital content. At the right price, seems like a win/win for all involved.