Facebook valuations are senseless, says Murdoch

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MySpace.com owner Rupert Murdoch scoffed at the $10bn-plus price tag being mooted for Facebook yesterday, suggesting the rival social networking site may be little more valuable than a telephone directory.

Speaking after the annual shareholder meeting of his News Corp media empire, Mr Murdoch said it would make "no sense" for Microsoft, Google or any of the rival suitors to buy a stake that valued Facebook at $10bn-$15bn, as has been reported.

"Facebook is a utility – I won't say it's a phone book, but a utility," he said. "No one knows what this scene is going to look like in five or 10 years, so the notion of paying a multiple of 100 times revenues, let alone profits, doesn't make any sense."

Invented less than four years ago by a Harvard University student, Facebook allows users to communicate online with friends. It has accumulated most of its 40 million users in the past few months, and its explosive growth has attracted investment interest from media companies, who think the potential from advertising revenues may be huge.

But Mr Murdoch ruled out a News Corp bid. His company bought MySpace for $580m in 2005, since when it has more than doubled in size to about 190 million members and has expanded its offerings of music and video. That business was "better on its own", Mr Murdoch said. "MySpace is wider, more cultural."

The media mogul trumpeted MySpace's expansion repeatedly during News Corp's shareholder meeting in Manhattan, when he survived an independent investor rebellion on the dual share structure that allows his family to control the company despite owning a minority of the shares.

Almost 23 per cent of the company's investors supported a proposal that all shares should have the same voting power. Stephen Mayne, the Australian investor who submitted the resolution, said it had gained support from about half the independent shareholders after stripping out votes from Mr Murdoch himself and from media entrepreneur John Malone, whose shareholding News Corp is about to buy out.

"Now that Mr Malone is off the books, you don't need to be so paranoid about someone taking over the company," Mr Mayne told Mr Murdoch at the meeting. "You're a legend. You've been chief executive for 55 years. No one is going to sack you. Stand on your record, you don't need to stand behind a gerrymander."

Mr Murdoch said investors who bought News Corp stock knew that he dominated the company, and the dual structure was good for shareholders. "Long-term stability of management means we can take bigger risks than other people. It allows the board to take a long-term view in decision-making and planning."