A federal court ruled Thursday that a lawsuit against the executives who sold social network MySpace to News Corp. can go forward, as Judge George King in the Central District of California rejected a motion to dismiss the case.
The case was brought forth by Brad Greenspan, who founded a digital-entertainment company called eUniverse in 1998. Greenspan served as CEO and chairman of the publicly traded eUniverse until late 2003, when he resigned amid financial woes that saw the company's stock delisted from the Nasdaq index.
While Greenspan was at the helm of eUniverse, he oversaw the creation of MySpace, but it wasn't until after his successor, Richard Rosenblatt, had taken over that MySpace gained mass appeal. Greenspan remained a shareholder, strongly opposed MySpace's 2005 sale to News Corp. for $580 million, and has been targeting News Corp. and the Intermix executives who sold the company with legal action since 2006.
The current class action shareholder suit, Jim Brown vs. Brett C. Brewer et al., targets Rosenblatt, former Intermix President Brett Brewer, and venture backer VantagePoint Venture Partners as defendants (among others), with "Jim Brown" a representation of Intermix common-stock shareholders whom Greenspan claims were defrauded of billions. The real value of MySpace, Greenspan argues, was much higher than $580 million and not all of the requisite financial information was disclosed.
"It has been three years since I worked around the clock pleading with other MySpace-Intermix shareholders to vote against the sale of MySpace to News Corp. in 2005," Greenspan said in a statement. "I knew that the value of the company was billions of dollars, however the deceptive practice of hiding MySpace financials by Intermix management robbed shareholders of their opportunity to adequately gauge the company's value."
Critics will likely say it's a cry for attention and money, quasi-analogous to how they perceived the legal action that the founders of ConnectU brought against social network Facebook, claiming that founder Mark Zuckerberg had stolen code and trade secrets from them. That suit appears to have finally petered out last month. As for the MySpace suit, the decision is in the judge's hands now.
Greenspan is now at the helm of Live Universe, an entertainment holdings company that has acquired struggling dot-coms like Revver, whose troubles he blamed on policy at MySpace that blocked its ad-supported videos.
LiveUniverse has acquired Pageflakes, a personalized home page service that had been rumored to be in need of a buyer. Pageflakes competes with the giants--Yahoo, Google, Microsoft and AOL, as well as Netvibes. It's no wonder that the company was looking for an exit. The acquisition was first reported by Techcrunch.
LiveUniverse was founded by Brad Greenspan, a founder of MySpace, and claims 55 million monthly unique users for its more than 30 entertainment sites, which include LiveVideo, LyricsDownload and TuneBlast. Initially, Pageflakes will be used to create "My LiveVideo" personalized pages.
Pageflakes CEO Dan Cohen, who previously worked on personalization at Yahoo and Google, will continue to run Pageflakes as a LiveUniverse subsidiary and also become senior vice president of LiveUniverse, reporting to Greenspan.
Deal terms were not disclosed.
CNET News.com's Caroline McCarthy contributed to this report.
Revver, a YouTube competitor that made a name for itself by paying video producers, has fallen on hard times.
The company's staff has dwindled to less than half the size it was 18 months ago, according to former employees. Rumors flitter around the Web about whether the company is running out of money. Now comes word that Revver has been trying to sell itself at a fire-sale price for months, according to three sources close to the company.
Revver's asking price is between $300,000 and $500,000, as well as the assumption of the company's debt, which is in the $1 million range, said two sources with knowledge of the negotiations. The sum is tiny considering that the Los Angeles-based Revver raised $12.7 million in venture funding.
The blog Contentinople reported last month that LiveUniverse, a network of entertainment Web sites owned by MySpace founder Brad Greenspan, had agreed to acquire the site.
The deal never materialized. A source with knowledge of the negotiations said talks stalled when Greenspan began "trying to drive down the price" and "that Revver's debt was an issue."
In response to questions from CNET News.com, Angela Gyetvan, Revver's vice president of marketing, said: "I'm not at liberty to discuss any of this with you. I can't comment."
Mark Elfenbein, LiveUniverse's chief operating officer also declined to comment.
Revver gained some notoriety in 2006 when video-sharing became a worldwide craze. YouTube dominated the sector but Revver tried carving out a niche by catering to videographers.
The company, backed by such investors as Draper Fisher Jurvetson, Bessemer Venture Partners, and William Randolph Hearst III, offered to share advertising revenue with makers of the most popular clips. The thinking at the company was that if Revver could win over the best creators, audiences would follow.
That's not what happened. Revver has yet to draw an audience big enough to make it one of the leading video-sharing sites. What it has done well is attract a small but talented group of video producers, the sources said.
"Their (producer) community is loyal to them," said one of the sources. "Otherwise, I don't know that they are worth much."
This is not the first time that Revver has entertained potential buyers. A year ago, News.com reported that representatives from Microsoft's video-sharing site Soapbox had toured Revver's offices on Sunset Boulevard. A source said at the time that Microsoft didn't appear to be interested.
- prev
- 1
- next
