Myspace BusinessWeek reporter Jon Fine reveals an interesting interview with Michael Wolff sharing his insight about MySpace, its value and prospects.

Michael Wolff, is the author of the new Rupert Murdoch bio “The Man Who Owns The News.”

Michael Wolff: MySpace. They [meaning News Corp] know they have a huge problem. They’re quaking in their boots about MySpace. It always was a little rustling when I was there, there was this rustling—

Jon Fine: What do you identify as the problem?

MW: Facebook.

JF: OK. But Facebook is still smaller in America, and—

MW: Absolutely. But you know the rhythms of the Internet business, which I think are still, at this point, immutable. Something else comes along—a better technology, a better flavor of the month—and you, the former, are downgraded. Possibly to the point of being downgraded out of existence.

JF: I think there you are falling into a fairly common thing. Facebook—it’s a better experience than MySpace. But the traffic on MySpace and the people on it…

MW: All of the growth now in MySpace is international.

JF: Sure. Because once you get to 75 million in the US, where are you gonna go?

MW: I know they recognize this: “We got to monetize this thing. We got to get this thing off the books.”

JF: Your magazine or my magazine would give both ears to get to $750 million in revenue [which is, very roughly, what MySpace’s revenues are]. The funny thing about MySpace . . .

MW: What they understand, is their $25 billion to $30 billion valuation.—

JF: But that’s [expletive]. We both know that’s [expletive].

MW: It doesn’t make any difference. That’s gonna go down. What they are looking at is the distinct possibility that it can go down to nothing.

JF: How do you find that plausible? It’s not even a utility like—-the anti-Google argument is this: If someone builds a better search engine tomorrow, I have zero switching costs. If I am on MySpace, I have 500 friends. I use it to communicate with people. You can’t just move. It’s a pain in the ass. All your stuff is there.

MW: But that’s exactly what they said about AOL.

JF: You did not develop that relationship with AOL.

MW: You did. You exactly did.

JF: How?

MW: Your email was there, because your friends were there. I mean, AOL operated actually as the community of its day. There were all of those—

JF: But besides the email and, OK, the—

MW: There were the infinite number of chat rooms. Layer upon layer upon layer of sex chat rooms.

JF: Of course. And I give you credit for having pointed to that as the secret driver of its success. But, all you need is a different chat room. You don’t have pictures up [on AOL]. You don’t have your history up there. You don’t have—

MW: It doesn’t matter. What they saw at the time was that [users] were absolutely wedded to AOL. That was Time Warner’s bet on that.

JF: AOL was monodimensional in a way that MySpace is not. I don’t think that’s particularly debatable.

MW: I don’t think that’s true. I think it is–if you’re on MySpace now, you’re a [expletive] cretin. And you’re not only a [expletive] cretin, but you’re poor. Nobody who has beyond an 8th grade level of education is on MySpace. It is for backwards people.

JF: [unsuccessfully stifling laughter] I don’t mean to get all Murdoch’s-kids on you [an obscure reference to an earlier part of the conversation], but if you are in a band, you are on MySpace. You have to be on MySpace. That’s a powerful driver. And second of all– if I am to accept your reasoning, even though I don’t–as the success of [News Corp’s British tabloid] The Sun will tell you, there are lot of cretins out there and you can make a lot of money off cretins. By appealing to their essential–

MW: No! That is the difference. And that is one of the interesting points of Murdoch. He wants to make money off of what he rightly saw as a rising lower class. He came to this country and he sees, that’s just not really true. No one really identifies with being lower class [in the US]. As soon as it comes to you—‘I am lower class’–you run, and you have to rehabilitate all of your aspirational identifiers.

WHO'S OPINION DO YOU AGREE WITH, MICHAEL WOLFF'S OR JON FINE'S, AND WHY?

WHAT IS YOUR OPINION ON THIS ISSUE?