• by Erik Sass , Staff Writer, November 19, 2010

Now that MySpace has thrown in the towel and acknowledged Facebook's total supremacy on turf it once owned, it may be a good time to revisit News Corp.'s decision to buy the once-great, now-humbled social network. Was it a good idea? Did they at least break even?

To do so, of course, is to question the judgment of the almighty Murdoch -- to suggest, even, that Rupert may be fallible. While most attention tends to focus on his many successes, he has also had his share of mistakes, setbacks, and reversals, like failing to penetrate the Chinese TV market. What's more, despite his reputation as a hard-nosed dollars-and-cents man, his strategy often shows a creative, intuitive flair -- meaning he doesn't always have a clear picture of business models in his mind when making acquisitions (for example, changing his mind about making the Wall Street Journal free on the Web).

Honestly, we'll probably never know for sure whether Murdoch regrets buying MySpace, or views it as an acceptable loss, or thinks of it as an interesting experiment which served its purpose, or has grown bored with it, or what. And rightly so: part of the Sage of Melbourne's mysterious attraction is attempting to divine what his true feelings and intentions are. But we do know some basic facts.

At first glance, the numbers look pretty good. News Corp. purchased Intermix Media back in July 2005 for $580 million. Although Fox Interactive Media doesn't release separate figures for MySpace, analysts have estimated its revenues at $180 million in 2006, $400 million in 2007, $600 million in 2008, $500 million in 2009, and $385 million this year -- or just over $2 billion in the five years since its acquisition by News Corp.

But that doesn't necessarily mean MySpace was profitable during these years -- even during the halcyon days of 2006-2007, when Facebook was still a minor irritant and the economy was still functioning. After agreeing to a three-year, $900 million ad pact in 2006, by 2007 Google was already expressing disappointment with MySpace's search ad performance, while Wall Street analysts began dialing down some of their earlier grandiose revenue predictions.

The financial results for News Corp.'s interactive businesses as a whole would seem to indicate that MySpace has been a drag on its bottom line. Assuming that Fox Interactive Media comprises most of the revenues in News Corp.'s "Other" category in its annual reports (and that MySpace in turn comprises most of the revenues in FIM) it's worth noting that the "Other" category has posted increasing operating losses almost every year since the MySpace acquisition: losses in this category came to $150 million in fiscal 2006, $193 million in 2007, followed by one profitable year with a $42 million margin in 2008, followed by another loss of $212 million in 2009, and $575 million this fiscal year (which ended in June). Adding it all up, this category posted total losses of over $1 billion from 2006-2010 -- all of which suggests MySpace hasn't exactly been a bonanza for News Corp.