Blog Post

MySpace to Spin Off Its Incubator Into A Separate Company; Financed By News Corp

In an otherwise unremarkable feature story in NYT about MySpace’s new plans, an intriguing piece of news buried towards the end: that MySpace is forming an incubator to gestate new companies. This will be a separate company, tentatively named Slingshot Labs, and will be financed by News Corp (NYSE: NWS). Chris DeWolfe, CEO of MySpace anticipates that it will nurture four or five consumer websites at a given time. Fox Interactive media, of which MySpace is a part, has had an incubator for a while, and has developed new services for MySpace.

So now instead of buying startups that survive off the MySpace economy, it will actively spur new ones to be born, just as its pace of growth is slowing down (and the competition with Facebook is white hot). Facebook’s attempt with its $10 million FB Fund has been a non-starter till now.

(The NYT story also says Chris DeWolfe gave them one of his first interviews since signing a new two-year contract with the News Corporation in October…really? We did one less than a month later, and I believe others did too.)

2 Responses to “MySpace to Spin Off Its Incubator Into A Separate Company; Financed By News Corp”

  1. I agree with Mr. Stark and would add that our company Fox Media Lab, has been incubating companies for years. Just seemed like "oh that's a good idea" to us. Fox Media Lab has been in operation well before the other Fox (1988).

  2. The slingshot is a good idea but, just like everything else in the News Corp portfolio, its value is dependent upon trust that News Corp promotions are beneficial to the consumer. That trust is fast disappearing. I'll give you one example:

    A regular advertisement on MySpace is for a free weather box installation program. The installation agreement says that the program will place a small icon with the current weather by the user's clock. Those who keep reading the mountains of legalize in the licensing agreement see that the program also gathers information from your computer and transmits it to a marketing company. By clicking on the agreement button, the user consents to the marketing company gathering any information it wants from their computer and selling it to whoever they want for any purpose they deem appropriate. It doesn't take a rocket scientist to figure out that your personal information will soon be transferred enough times that it will eventually end up in the hands of an identity thief. Those who trace the theft of their identity back to their computer will probably install a spyware program that tells them the weather box sold their personal information. Knowing that the weather box came from MySpace, the user will never click on another MySpace advertisement again.

    Most websites recognize this pattern and will therefore not sell its users things that harm them, but Fox News, MySpace and other News Corp holdings haven't figured this out. They will sell anything that anyone pays them to sell. As we've seen lately, Fox News is even willing to sell us presidential candidates who are members of the Council on Foreign Relations.