• Ad Age, Thursday, May 3, 2007 11 AM

Richard Rosenblatt, the chairman-CEO of Demand Media proclaims that MySpace would no longer exist if it hadn't been acquired by News Corporation in 2005. Presumably Rosenblatt, the former CEO of MySpace parent Intermix, would know. After all, he sold the company to Rupert Murdoch's media empire for $580 million.

"MySpace was in an interesting stage of its development [when News Corp. acquired it]," he said at a conference last week. "It had a different type of capital structure, and we weren't able to make the type of investments for the infrastructure. Ultimately, if we hadn't sold to News Corp., MySpace wouldn't be around today."

He points out that social media in general--which includes anything from Digg.com to Facebook--continues to be dominated by venture capital-backed startups rather than major media players. That said, Rosenblatt believes more established companies like Facebook and Bebo will survive on their own. Because MySpace had no real advertising model at the time, he implied that Intermix's $580 million sale price wasn't too low.

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