Haven't we seen this movie before?
For those big traditional media companies -- Disney and Viacom -- you can see the attraction, looking to attach and/or promote its traditional content assets to a big social media platform.
But here’s one word of warning here, with reference to the past: MySpace.
Wasn’t this burgeoning social media platform the hot thing back about a decade ago? Viacom and News Corp. battled to acquire MySpace, which was eventually bought by News Corp in 2005 for $580 million. Three years later, News Corp witnessed MySpace’s fortunes fade with the likes of Twitter and Facebook rising.
Before the News Corp deal, Viacom Chief Executive Tom Freston mulled the idea of making a move for MySpace, believing social media would kick-start Viacom’s young network assets like MTV and VH1 into the new digital world.
However, he didn’t get the deal done. A year later, Viacom Chairman Sumner Redstone fired Freston in large part because he hadn’t bought MySpace.
No matter. Freston was vindicated. Seven years later, News Corp sold MySpace for a mere $35 million -- less than a tenth of the price it paid for the company.
MySpace’s problem was its somewhat silo-ed "portal strategy," amassing an audience around entertainment content, versus Facebook and Twitter’s more open social media experiences.
Now, a bigger and more successful social media platform could be another asset for a traditional TV media company -- with a much larger price, of course.
Could Viacom make a bid, even in its still-uncertain state: no permanent CEO as yet, and the possible sale of parts or all of the entire company?
There is value in Twitter. Though it hasn’t seen much growth, Twitter has 313 million monthly active users. (By contrast, MySpace currently has around 50 million.)
For Viacom’s young viewers, this could be a good match, helping to boost still valuable network brand assets, according to many analysts. (Valuation of those assets is another matter.) Disney could also be a natural partner -- given its younger-skewing media platforms, including ESPN.
Still, you have to ask: Is this another MySpace moment for traditional TV-based media companies?