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Wed Sep 27, 2006 09:49 PM ET

SAN FRANCISCO (Goiters) – MySpace, the social networking Web site, could be worth around $0 within three years, measured in terms of the value created for shareholders of parent company News Corp. , according to a media analyst forecast on Wednesday.

PBS MediaShift analyst Mark Glaser said he had come away from a meeting with various disgruntled teenagers who had given up MySpace accounts, believing that “media investors may not fully appreciate what has already been done with MySpace or what may lie ahead when everyone leaves MySpace for different, more hip social networking sites.”

“Worth absolutely zero dollars in a few years? It is possible,” Glaser wrote in a research note to himself.

MySpace was acquired by Rupert Murdoch’s News Corp. for $580 million less than a year ago. It now boasts more than 90 million active users, though it’s unclear what they all are actively doing there.

Glaser said MySpace could demonstrate a value of between 0 dollars and a buck fifty within a few years, give or take a wooden nickel. Acknowledging he was making an “audacious claim” he justified the forecast on the basis of a Wall Street analyst’s “raw, unprecedented hubris that requires some type of counter-analysis.”

He also said the site’s “massive” chance for becoming untrendy, capacity to become “considered a dinosaur and irrelevant for the young” and management team out of touch with reality lent credibility to his prediction.

Glaser based his view on an extrapolation of estimates for the value of old discarded Internet properties ranging from a few rhinestone dresses from dot-bomb Boo.com to a few old bags of dog food from defunct Pets.com.

He admitted that MySpace was currently sold out of space for video advertising, but that this fact would be mitigated in three years when no one would be watching video on MySpace.

MySpace management believes its video service ranks No. 3 among U.S. Web users behind Yahoo Inc. and YouTube, Glaser said, but again, these are statistics based on how many people watch video on the site — not on its actual bottom line or on revenues brought in.

Britain is adding 25,000 MySpace member profiles per day. Australia has 2 million unique users. MySpace France began public testing three weeks ago, Glaser noted, proving that MySpace must look elsewhere for growth because the kids here in the U.S. are likely growing tired of it.

MySpace is internally developing a MySpace Web application to run on mobile phones that should be launched in three to four months with a major U.S. carrier, Glaser said. And there’s a good chance MySpace will be developing an amazing array of services in the coming three years, all of which will be worth about 0 dollars if the actual visitors to MySpace decide not to visit anymore.

*****

Yes, the above “wire story” is a spoof of a very real Reuters wire story that ran earlier on Thursday, and has been under my skin like a bad splinter all day and night. That story is headlined, “MySpace May Be Worth $15 Billion,” and depends entirely on the figurings and machinations of one Wall Street analyst who met with News Corp. execs. This story, along with the rampant speculation on Facebook being worth $1 billion, smacks of some of the worst instances of poor business reporting I have seen recently.

How did so many people get fooled during the dot-com boom in the ’90s? Say hello to bad bubble reporting, take two. First BusinessWeek runs a cover story on a Digg founder having made “$60 million in 18 months,” and then Reuters runs a story titled “MySpace May Be Worth $15 Billion.” And I might have an invisible Siamese twin attached to me at the hip. And you might actually believe these things. It’s a sad state of affairs for business reporting at the moment.

What do you think? Will MySpace be worth $15 billion or $0 in three years or do you even care?

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