Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Monday, October 09, 2006

NewsCorp Victorious Over "FreeMySpace"

Rupert Murdoch probably wasn't losing too much sleep over the Freemyspace.com website, but this was something that NewsCorp (NWS) will be glad to have behind it. A court tossed out the claims by the earlier ousted CEO of Euinverse, which became Intermix, claiming that NewsCorp had essentially been allowed to steal MySpace.

All in all the suit seemed a bit retrospect and more like envy than it seemed meritous, but NewsCorp should be glad this looks like it may go away. With the resounding success of MySpace it was always a risk that a court or a jury could be sympathetic and make the company do a monetary give-back in some sort, but now it looks legally quelched.

Here are the guts of the press release:

A Los Angeles Superior Court judge summarily rejected legal challenges to News Corporation's 2005 acquisition of Intermix Media, Inc. The legal challenges had been led by Brad Greenspan, the former Chairman and CEO of Euniverse (renamed Intermix Media by the new management), who was ousted by Euniverse's board of directors in 2003, nearly two years before the acquisition, while MySpace was still in its infancy and in beta testing. On Friday, October 6, 2006, Superior Court Judge Carolyn B. Kuhl fully dismissed Greenspan's and the other former shareholders' challenges to the News Corp. acquisition, finding that the acquisition was lawful and ratified by the fully informed vote of a majority of the Intermix shareholders.

"News Corporation and Fox Interactive Media feel vindicated by Judge Kuhl's ruling and have always believed that this is merely a situation of unchecked envy leading to a loss of common sense," said Mike Angus, General Counsel of News Corporation's Fox Interactive Media. "We hope this ruling will finally put an end to Mr. Greenspan's repeated and unsubstantiated attacks and look forward to focusing our attention on continuing to strategically grow our business."

Richard Rosenblatt, the former CEO of Intermix and former Chairman of MySpace, who replaced Greenspan, responded to the ruling, saying, "I have exercised great restraint in not responding to Mr. Greenspan's baseless and defamatory claims about the propriety of the News Corp. acquisition and my role in the transaction, with the expectation of being vindicated by a court of law. Lost in all the rhetoric is that we delivered to the shareholders, including Mr. Greenspan, a nearly 700% increase in stock price."
 Subscribe

Powered by Blogger