It's no secret that MySpace (owned by News. Corp. (NASDAQ:NWS)) wants to enter China. The interesting little secret is, however, that MySpace doesn't just want to enter China, it wants a separate public entity to go public there. And, in order to go public in China, one must have strong relationships with partners there.
That's why MySpace founders Tom Anderson and Chris DeWolfe went to China for a week in November, along with Wendy Deng, Rupert Murdoch's Chinese wife. "She knows everyone there and everyone wants to know her," said someone who knows Wendy well. But it's also why MySpace is in deep discussions with IDG-Accel Partners to launch in China, according to someone close to the discussions. IDG-Accel is the $310 million venture capital fund that Accel and IDG formed in 2005. The IDG China team have venture partners who have a strong network in China. They were early investors in Baidu (NASDAQ:BIDU) and cTrip (NASDAQ:CTRP). Pat McGovern, founder and CEO of IDG, and Jim Breyer of Accel Partners are the two members of the strategic board of IDG-Accel.
MySpace wants to strike a partnership with an entity like IDG to give it a similar structure as the deal it has with Softbank (OTCPK:SFTBF) in Japan, where MySpace also wants to go public. Several months ago, a Japanese social network called Mixi.com went public and ballooned to a $2 billion market cap. And, it only had 5 million members.
And, we thought there was a bubble here.