Apparently, they kiss and make up. Valleywag asks what kind of concessions did MySpace get from Photobucket. TechCrunch wants the lowdown. Mashable says this is surprising because the PR damage was done, though something tells me Murdoch et at. could care less about PR and are more concerned with the financials in the deal.
Hmm… I have no clue for sure, but if I were Rupert Murdoch and Peter Levinsohn, I’d ask for:
1- revenue share with a 3-6 month window, with the option but not the obligation to renew terms… since this is relatively small now. If the revenue is good, ask for more. If it’s bad, demand more or threaten to cut them off. Hey, that’s cutthroat, but I did say “if I were Murdoch…”
2- some kind of options/equity on the company, be it actual stock or some form of warrants. News Corp. got 5% warrants in Roo plus the option for another 5% in warrants just for using Roo.
Is that all? Perhaps, but I am sure that News Corp. might have even:
3- asked for some kind of option to buy the company in 12 months, which in of itself means little,
but then probably got:
4- some kind of first right of refusal to match any offer Photobucket gets.
While one argument is that the VCs or management [hopefully] balked at #3, the flip side of #4 is that if they did commit to this, it would create a false sense of competition for Photobucket, because News Corp. would consider matching it, meaning that any would-be buyer would try to bid high enough to make Murdoch blink… which, if you ask Sumner Redstone, is not a good option.
Disclaimer: used to work for News until they kicked me out, own shares in Roo.
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