The second banker said that although the sector has grown, the dynamics have changed, making it a more challenging market than when News Corp acquired it. “App stores are taking all the value,” he said. For this reason, it would be difficult for News Corp to achieve the same valuation it bought Jamster for, he said.
The business may have declined recently due to difficulty with leveraging MySpace to drive traffic to Jamster, the executive added. When News Corp purchased Jamster, it believed it could cut costs by eliminating marketing spend, and integrate the mobile content company with MySpace. Now that MySpace is seeing sluggish growth, Jamster may be as well, he said.
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Potential suitors have been rumored to include a wide range of companies from carrier like Vodafone, Telefonica and Telecom Italia to other mobile media companies like Zed, Buongiorno, Dada, and Flycell. Taking an aging asset and bringing it into the new age is one thing – purchasing a business that is collecting dust is another. I can’t see this being a very good buy for any of these companies unless they’ve got a very specific plan to fold in the current business.
On the other hand, MocoNews reported that last year Fox Mobile Group was attempting to launch a Hulu-like service for mobile phones and if there was anything noteworthy in this department, why couldn’t a company like Hulu itself express interest? Maybe because 9-months ago they claimed it would “debut in the coming months” and it still isn’t anywhere to be seen.
I’m thinking that News Corporation sees MySpace as their biggest opportunity and wants to drop everything else to focus on righting the aircraft before it crashes into Mt. Facebook. Do you see the assets of Fox Mobile Group fitting in anywhere in particular (with another company)? Play CEO for a minute and tell us what you would do.