Myspace is the redheaded stepchild of social media. Once at the top of its game and the world’s largest social network, with the introduction of Facebook, Twitter, and others, it quickly went downhill. Now, according to some new slides from Business Insider, it’ll lose $43 million this year on revenue of just $12 million.
For a site that’s continued to lose money left and right over the last several years, is it possible to keep things moving? Myspace thinks so and has a big plan to pull itself out of the dumps and into the stratosphere.
In order to raise $50 million, putting together a pitch deck was necessary which lead to slides being leaked. Even though traffic has increased 36 percent since December 2011, breaking through financially with music and advertisers just hasn’t happened, hence the big loss.
As far as what Interactive Media Holdings, the company that acquired Myspace, wants to do with a $50 million investment, the plan is to re-launch as a competitor to Spotify and Pandora. $10 million will go towards marketing, $15 to $25 million will go towards licensing deals with musics labels, and $15 to $25 million will be used to simply work with as general capital.
The whole plan is rather bold, but the reality is that it’s going to be hard to convince investors. Even with projections up to 2015 in the hundreds of millions, looking at the past often lets you understand the future.
Myspace doesn’t have the same brand connection as it used to. Nowadays, it’s simply a laughing stock. To move above and beyond, drastic measures will have to be taken. Pandora and Spotify are at the top of their game right now. There’s a ton of potential with the new design, but at the end of the day, it’s the users who determine how successful something is.