In 2005 MySpace’s CEO refused to buy Facebook for $75 million. In 2011 MySpace was sold to an insignificant company at the knock out price of $35 million.
Back in 2005 MySpace was one of the fastest growing social networking websites out there. In a few years it peaked to the top and managed to hold its spot regardless of the rising of Facebook, Twitter, Bebo and other similar social media websites. At that time Mark Zuckerberg met with MySpace’s CEO Chris DeWolfe and offered a deal. Chris refused to buy Mark’s website for the asking price of $75 million.
Having in mind that later that same year MySpace was acquired by Rupert Murdoch’s News Corp for a total of $580 million, the former CEO Chris De Wolfe probably didn’t regret refusing Mark’s offer. However, Mark made another offer – this type he asked if Chris wanted to buy Facebook for $750 million – just after the acquisition and just a few months after his first offer. Obviously, MySpace again said no.
In 2011 after the drop of revenue, users and activity of MySpace Facebook quickly took over the top position as the most popular social networking website. At that point MySpace’s expenses had grown so big and the revenue had dropped so drastically that News Corp was forced to sell it. At first the company thought they could get rid of MySpace for up to $200 million. Eventually, they sold it in 2011 for $35 million – far from the initial $75 million Mark once offered for his own company.
Nowadays MySpace is worth even less, while Facebook’s current assets are $49 billion. In other words, its actual acquisition price would be more than $49 billion and much more than the final $35 million MySpace sold for. And if Chris DeWolfe had accepted to buy Facebook for those $75 million in 2005 none of this would have happened!