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News Corp. on verge of Myspace sale

By Agence France-Presse
Tuesday, June 28, 2011 19:26 EDT
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WASHINGTON — News Corp. is on the verge of selling Myspace and a deal could include laying off more than half of the troubled social network’s staff, The Wall Street Journal reported Tuesday.

The newspaper, citing a “person familiar with the matter,” said there were two leading bidders for Myspace — the digital ad-targeting firm Specific Media and private equity firm Golden Gate Capital.

The News Corp.-owned Journal said a deal could be announced as early as Wednesday, and would include shedding more than half of Myspace’s staff of about 500 people.

The newspaper said the buyer would pay significantly less than the $100 million News Corp. had hoped and the Rupert Murdoch-owned company would retain a small stake in Myspace.

Technology blog All Things Digital, owned by News Corp., said the price for Myspace was in the $20 million to $30 million range.

News Corp. paid $580 million for Myspace in 2005. It was the leading social network at the time but has since been eclipsed by Facebook.

The Journal said Specific Media and Golden Gate Capital were the leading bidders but several otherrs remain in the mix, including two groups involving Myspace founders Chris DeWolfe and Tom Anderson.

DeWolfe has been in talks to acquire Myspace as part of a group backed by Austin Ventures, the newspaper said, while Anderson is part of a group backed by Criterion Capital Partners.

News Corp. chief operating officer Chase Carey put Myspace on notice in November, saying the losses at the social network were “unsustainable” and the company revealed in January that it was for sale.

News Corp. does not break out results for Myspace in its earnings but the “other” segment, which includes the social network, reported a second quarter operating loss of $156 million, $31 million wider than a year ago.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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