This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
1/29/2006
Myspace or Big Companies Space?
So, have you logged into your myspace account today? Myspace is the ultimate networking platform for everyone these days and has reunited old friends and has lowered the single-dater’s “hook up” costs and has increased his or her benefits. Just with the click of the good ol mouse you have millions of people at your very fingertips. This invention has been a huge success to say the least, but as always when something gets too big it is target for a takeover from someone bigger. In a recent article from Newsweek it explains that AOL is looking to buy out this exciting new “internet connecter”. In this competitive world it’s exciting to see things like myspace come around, but does this creative spirit that comes along with competition hindered by big and rich companies buying them out? Or does it increase these small companies capital and take them to a whole new level?
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2 comments:
-1 on Tom for questionable spelling and grammar.
Hmmm. If you invented Myspace, would you want to be bought out and made rich? If the answer is yes, then there is no problem here.
One issue that comes up in the mergers and acquisitions portion of a corporate finance class is that one of the main reasons for a public offering is so that the initial insiders can get out. Whether or not they want to at the time, the proceeds from an offering make this a more viable option by turning your sweat equity into paper equity.
I agree with Bryce on this one. The demographic that uses myspace is not one that looks kindly upon big business. The users of myspace are all about supporting the little guy. They support indie bands, free online services, and other things that are not just out to make a buck off of them. AOL is going to have to consider these issues if they want to keep these people using myspace. It won't be long before another copy-cat comes along that might lure a big chunk of myspace users away.
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