MySpace was big: 20 million people had signed up, and 100,000 more were arriving every day. And it was busy: 6.2 billion pageviews a month made it the fifth-most-visited site in the US from a standing start 18 months earlier. Added bonus: totally viral marketing and zero content costs.

When Levinsohn had earlier balked at choosing one company, Peter Chernin, News Corp.’s president and Murdoch’s second in command, proposed buying both. “It’s a couple of percent of our market cap,” he told Levinsohn. “Either we’re serious about this or we’re not.” The only obstacle was archrival Viacom, which was already deep in negotiations for MySpace, a perfect online mate for MTV. “They were pulling fingernails over the last $50 million,” says one News Corp. exec. Over a frantic weekend, Levinsohn trumped Viacom with a $580 million bid.

When the smoke cleared, Levinsohn and his team owned the biggest mall-cum-nightclub-cum-7-Eleven parking lot ever created. They also got the hottest pair of Web magic-spinners since Googlemeisters Sergey Brin and Larry Page. And they had a problem: how to turn this upwelling of teen spirit into big numbers at the bottom of News Corp.’s balance sheet.

Full Story