Is an IPO in MySpace's Future?

By Chad Brand of The Peridot Capitalist

I was shocked to hear that MySpace.com was the most visited U.S. web site last week. I am well aware of the site's popularity (and even have an account on the site), but still, finishing ahead of Yahoo! Mail and Google Search is pretty darn impressive. It appears that News Corporation (NWS-A) got the deal of the year when it purchased MySpace for $580 million in 2005.

Should investors go out and buy News Corp stock at $19 per share? Maybe. The only problem with that idea is that NWS has a market cap of $60 billion, so MySpace still is only a small fraction of its business. How much is MySpace worth? I really don't know, but it would not shock me in the least if it could get a $5-$10 billion market value on the public market.

If I was running News Corp, I would probably strongly consider spinning it out in an IPO to monetize the asset and boost shareholder value, especially since the site is really coming into its own right now. Will an IPO happen? I haven't heard anyone mention the idea yet, but would not be surprised if we do soon.

Meanwhile, kudos to Rupert Murdoch for such a great move.

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