THE DEAL -- Jul 19 -- News Corp.'s $580 million acquisition of Intermix Media Inc. and MySpace.com yesterday could spark some renewed interest in this once-hot Internet sector. "Media companies tend to keep a close eye on what the others are doing. With a purchase like this, you can't help but believe that other media companies will be looking closer at other social networking sites," said Brad Bowers of BlackInc Ventures LLC. The acquisition will boost the valuation of other social networking companies. August Capital partner David Hornik, an investor in Tickle, argued the increased ability of online companies to monetize their viewership could lead to more consolidation. Last year, Barry Diller's IAC agreed to pay an undisclosed amount for ZeroDegrees Inc.
Mark Brooks: How long did it take Yahoo and Amazon and Match to become profitable? The leading social networking sites will make money aplenty. Users will demand value added premium services in time, and be willing to pay for the conveniences. Huge viral traffic volumes are keeping the major players afloat with healthy advertising fees right now.
