Business plans just don't add up
As someone who's trying to start an online business it's interesting to see media companies struggle to get in the game. Everyone will tell you it just takes an Internet connection and a laptop to hack on to make gazillions of dollars - here's an interesting analysis of a recent Business Weeks cover story about how "How this kid made $60 million in 18 months."
This week there is talk that Viacom considers bid for Bebo and spending something like the $580m News Corp paid for MySpace. If you spend half a billion you would think there was a strategy but just look at what happened with the TW/AOL merger. Last week we heard that Murdock was struggling to make money out of MySpace when this week we have Google To Pay $900M To Provide Search For MySpace.com.
I think this is odd unless News Corp believes that Google is overpaying or it has other ways of monetizing the subscriber base using something other than search-based advertising. In general terms they should know more about advertising than Google as The Economist pointed out in it's special report on Internet Advertising. Google has a get-out clause based on the projected number of MySpace's subscribers so I suspect it knows what it is doing.
We may just be in bubble territory but will Viacom buy Bebo just to allow Google to monetize it. Now how do you go about writing a business plan in this industry and expect to get funding :)