VideoCodeZone: Yours for $800,000

A number of social networking services are up for sale at the moment. Two in particular - VideoCodeZone and Mojungle, are MySpace add-ons that have been covered extensively on Mashable. I think both of these startups are wise to get out of the market as soon as possible, for reasons I’ll explain.

VideoCodeZone, according to Mashable Labs, was the number three video site for MySpace users in September. How much is that worth? According to the founders, they’re receiving 200 million monthly pageviews and make $47,000 per month. Even though those figures may be exaggerated, they’re in line with what we know about the leading MySpace layouts sites (now do you understand why Mashable is so obsessed with this market?). They have a database of 415,000 members, with 1,800,000 daily unique visitors, they claim. If you want to buy VideoCodeZone immediately, it’ll cost you $800,000 on SitePoint. The bidding, meanwhile, has reached $350,000.

If you’d asked me 3 months ago to value VideoCodeZone, I’d have placed them in the $600,000 - $800,000 range. But then something happened that could be disastrous: MySpace blocked them. In September, they were the 3rd most popular video provider on MySpace behind MySpace Video and YouTube. Now that they’re blocked, the site’s biggest traffic source is set to dry up. Incidentally, the most likely acquirer, LiveUniverse, is currently suing MySpace over their tendency to block certain third-party add-ons.