Buy Something Social, Volume 2 - Unless You're Social Already

Implications: Nothing may happen because: - Google's investment in MySpace runs for a few more years - Facebook's asking price went up with the recent purchases, plus Microsoft owns all the banner inventory for a few more years - What happens to IGN? - If given the option, Yahoo! would likely partner with Facebook vs buying - similar to MTV Networks, eBay, etc.

Analysis: Volume 1 talked about Yahoo! purchasing something other than the big 2 - MySpace or Facebook.  Now it looks like Mr Murdoch wants to make me look silly, even with the caveat that anything's possible.  Well, let me add more skepticism to a deal getting done, and it's based on current relationships that would have to be terminated to allow Yahoo! the opportunity.

Did everyone forget the $900 million deal MySpace did with Google?  I guess so, because writers are quick to make the Yahoo!/News Corp deal near-final or wild speculation.  Either way, Google's partnership doesn't really matter.  But I bet it will if this is even a remote possibility.

And what about Microsoft owning 100% of all banner inventory on Facebook?  Yahoo! would have to repurchase that from MSN at a stiff premium.  If you're throwing money around - billions, at that - what's a couple extra few hundred million to another competitor?

Lastly, the "other purchase" being IGN - what would their fate be?  The property doesn't fit into much else in the News Corp portfolio, unless they keep it and add online content sites.  With MySpace, believe it or not, IGN makes sense.  They are both communities based on entertainment - one on gaming, the other on music - and social, collaborative and could work well together when it makes sense.  So without MySpace, News Corp would either have to get rid of the network or make new content purchases.


The most likely outcome is that Yahoo! creates a relationship with Facebook, much like the one they have with Viacom & MTV Networks.  There are other, cheaper, and/or even more visionary options for Yahoo! than buying Facebook outright, so if they're smart, Yahoo! will work on a strategy for 2008 over the next 6 months, integrate Right Media, and tweak Panama and natural search's secret sauce before stretching too far with a deal like Facebook or MySpace.