Brad Greenspan, the 33-year-old founder of MySpace.com who was badly bruised in his failed bid to block its sale to Rupert Murdoch’s News Corp., has resurfaced.
He’s launched BroadWebAsia, a small firm based in Los Angeles with an office in Shanghai, which has in turn taken stakes in 20 Chinese Internet companies that focus on entertainment and like MySpace social networking.
Greenspan’s Asian foray could conceivably set up Round Two between the Internet wunderkind and media mogul Murdoch, whose News Corp. is currently the largest American media investor in Asia.
“He wants to take it right to Murdoch’s new playground,” said one former colleague at Intermix, the company that sold MySpace to News Corp. despite the objections of Greenspan, who was its largest shareholder at the time. “He thinks that will make a statement.”
Greenspan wouldn’t address the subject last week.
“I went to Hong Kong a couple of times, meeting with some business partners about a year ago and I just fell in love with the place,” Greenspan said. “This is a fast-growing place.”
And how.
The 20 sites run by Greenspan already draw more than 20 million unique visitors and almost a billion page views per month. Greenspan points out that an estimated 120 million people in China have Internet access. That’s just 10 percent of the population, so the growth potential is phenomenal, he said.
Greenspan said he has focused on investing in already-established Chinese companies in order to navigate the difficult regulatory environment in China that includes censorship of online content.
“We’re working with Chinese entities that have already thought out those issues rather than just trying to create a MySpace 2.0,” he said.
He said each of his investments so far have ranged from $200,000 to $3 million and that he intends to raise $50 million through private equity or the public markets in either the U.K. or China. He also intends to invest in Asian companies outside of China.
Bitter battle
If Greenspan were trying to stick it to Murdoch, it would be no surprise. While he made an estimated $47 million from the MySpace.com sale and while he denies revenge is a motivation for his new enterprise, he doesn’t mask his bitterness at the way the sale was conducted.
Greenspan maintains that revenue was skyrocketing at MySpace and that the $550 million price tag was too low. News Corp. has since bragged that its recent $900 million deal between MySpace and Google already has made the acquisition worth the cost.
News Corp. representatives would not comment for this article.
Greenspan is territorial when it comes to the actual origins of MySpace.com. He admits that he didn’t invent the software, but he did found eUniverse, where the site was developed and provided key funding.
MySpace.com co-creators Chris DeWolfe and Tom Anderson were working for eUniverse and Greenspan in 1999 when they built the social site as an answer to Friendster.com. Greenspan was adamant that the site be free-of-charge, a stance seen as crucial to its nearly instant popularity. When MySpace took off and the name of the company was changed to Intermix, Wolfe and Anderson were both given management oversight of the site under Greenspan, who owned 30 percent of the company.
The aggressive Greenspan continually clashed with the Intermix board, however, and he was unceremoniously displaced by the directors and new chief executive, Richard Rosenblatt, in 2004.
Though his tumultuous tenure at Intermix was over by the time News Corp. bought MySpace in 2005, Murdoch played a key behind-the-scenes role wresting control of the company from Greenspan and others.
In April of that year, Intermix was sued by New York Attorney General Eliot Spitzer for downloading intrusive software tens of millions of times to computers nationwide, and more than three million times to New Yorkers.
That led to a $7.9 million settlement from Intermix and Greenspan was forced to pay $750,000 out of pocket in penalties and disgorgement in connection with the investigation.
During the negotiations for MySpace, Murdoch and News Corp. offered to indemnify the Intermix executive core but not Greenspan, who had left the company of any legal responsibility for actions connected with the site.
Greenspan attempted a buy-back of Intermix Media Inc.’s interest in MySpace.com just a month before News Corp. took over the social site. He was rebuffed by the board, which clearly wanted to seal up the deal and collect payments from Murdoch and News Corp.
According to Greenspan, who is still involved in several lawsuits targeting Intermix and financial investors Anthem and VantagePoint, Murdoch dangled jobs and money before Intermix President Rosenblatt, with the intent of hurrying its $12-a-share-offer for MySpace.com into reality.
Greenspan contends that other media firms were interested in MySpace.com and that the price could, and should, have been much higher. He said that Rosenblatt subverted the system so that other media companies who had shown interest, like Viacom Inc., were left out of the picture.
“The process started, but they just decided to sell to (Viacom unit) Fox,” Greenblatt said. “That way they destroyed Viacom’s chance to bid.”
Trent Lapinski, an Internet journalist who followed the sale from the beginning, agrees that Greenspan got the short end of the deal.
“I had Viacom on the record saying they were talking to MySpace,” said Lapinski. “They said they were looking at the property but ultimately didn’t want to spend the money.”
Greenspan today admits that the wild success of MySpace was anything but extensively planned and strategically considered.
“I wish someone could have said that it was some deep philosophical discussion,” Greenspan laughs. “The reality was, we just executed it much better.”
He’s hoping that translates into Mandarin.
