Yahoo-MySpace: Good. God.

Posted by: Jon Fine on June 20

Multiple reports out there revealing (very) early stage discussions between Yahoo and MySpace over a partnership that would value the latter at $10 billion.

That’s “$10 billion or more.” I’m as big a fan of this whole social-networking-thing as practically anybody, but am I the only one who thinks this valuation is — how to put this properly? — deranged?

Around two years ago, I riffed in a column about traditional media companies’ strategic missteps:

To move the needle right now, you need something massive. You need, for instance, to buy Yahoo. Of course, today it’s too late to buy Yahoo. Today, Yahoo buys you.

Assuming, that is, that Yahoo thinks its business sense can cross the generational divide. Or that it’s even worth the bother.

We are now in 2007. Yahoo’s reeling from its own missteps, and Yahoo triumphalism is long gone. Hence the MySpace discussions. And hence the new reality: In 2006 and 2007, Yahoo might have bought Facebook. In 2008, maybe Facebook buys Yahoo.

Assuming Facebook thinks its business sense can cross the generational divide.

Or that it’s even worth the bother.

UPDATE: Citi’s Jason Bazinet points out in an analyst commentary on the proposed deal that “valuation questions remain.”

Huh. You think?

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