NewsCorp Considers Selling MySpace

More bad news for MySpace. Parent company NewsCorp has admitted they are considering selling the company, just one day after announcing layoffs that will eliminate almost half the staff.

"News Corp. is assessing a number of possibilities including a sale, a merger and a spinout," Rosabel Tao, a spokesperson for MySpace told Bloomberg. "The process has just started."

NewsCorp, headed up by media baron Rupert Murdoch, bought MySpace for $580 million back in 2005, but the site's poor performance in recent years has proven unsustainable. The division of NewsCorp that owns MySpace lost $156 million in the last quarter.

"Current losses are not acceptable or sustainable," said NewsCorp COO Chase Carey in November.

Yesterday, MySpace announced that they would fire almost 500 people of their 1,100 staff, a move that has prompted outrage from disgruntled ex-employees. One person claiming to be an ex-MySpace employee wrote into TechCrunch with a bitter missive accusing the NewsCorp of being "a failed company, in the hands of leadership lacking competence and ethics, and motivated primarily by personal gain."

Though MySpace was one of the first social networking sites in existence, it was quickly overshadowed by the now seemingly-indomitable Facebook, forcing the company to rebrand itself as an entertainment hub, or as they put it, "the leading social entertainment destination powered by the passion of fans."

MySpace's great cachet used to be in its musician community--fans and bands could join together to spread the love, and the music. Their rebranding reflects the desire to recapture that appeal. But, as GigaOM has observed, Rupert Murdoch's great skill has been in "selling exclusivity"--something the nature of the Internet has a way of destroying gleefully.

But even if MySpace has about 65 million users, the numbers are paltry compared to the over 500 million strong population of Facebook. While Goldman Sachs's recent investment into Facebook boosted its valuation to $50 billion, similar number crunching puts MySpace at just around $1 billion.

Comments

[ndlekas]

01:52 AM on 01/15/2011

I'm so glad! Rupert murdoch is the dark lord of the sith. There is an apprentice out there....Lloyd blankfein maybe?

[cvbnm67]

04:11 PM on 01/14/2011

I hope Murdoch does not sell MySpace. The more money he loses the less money he has to spend on that hate mongering FOX News. Oh, how I pray this is a sign of the fall of his empire.

I am allowed to dream.

[exigent]

02:31 PM on 01/14/2011

The thought of murdoch failing to profit on this L0SER makes babies smile

[More4Kids]

10:42 AM on 01/14/2011

An alternative is FriendBurst.com. Many old MySpacers have already headed that way.

[AllyCat7]

10:29 AM on 01/14/2011

MuSpace never changed the cheap look and feel that helped tank them to begin with. They really don't know what they're doing. What fools.

[Nerdnarok]

09:45 AM on 01/14/2011

Laying off those 500 employees should really stem the cash bleed at MySpace long enough for Newscorp to make it profitable before a sale or a spin-off.... assuming each employee had an annual salary of more than a million dollars. Seriously, I don't know what they're smoking at Forbes valuating MySpace at a billion dollars. Somebody over there forgot to carry a few 1s and where the decimal goes or they made a $950 million dollar rounding error. It happens.

[Steve Davis 1]

09:13 AM on 01/14/2011

When I learned News Corp had bought MySpace, I decided to ignore my account there. Apparently, for many other reasons, many others have done the same.

[cvbnm67]

09:07 AM on 01/14/2011

They treat their employees like crap.

[cvbnm67]

09:04 AM on 01/14/2011

I'll take it. My cat loves social networking. We will call it MeowSpace.

[AllyCat7]

10:26 AM on 01/14/2011

lol

[RattleCat]

08:39 AM on 01/14/2011

Talk about oil and water.  In what universe did the most backward thinking conservative tycoon in the world believe his company would be compatible with one of the original out-of-box social media upstarts?

[southernfried]

08:36 AM on 01/14/2011

myspace is crap now

full of spam

[WaPoFan]

08:04 AM on 01/14/2011

I'll give them $10 for it. They can keep the change.

[Breckster82]

09:16 AM on 01/14/2011

you're overpaying...

[P Markham72]

05:23 AM on 01/14/2011

Who would buy MySpace? Even in 2005 any fool could see it was like buying a junk car that was just waiting to breakdown. Murdock should have used the Lemon Law defense long ago. He's not going to see that money back anytime soon.

[blingladen]

05:00 AM on 01/14/2011

Considering Facebook is a bubble waiting to burst, I think it's fairly easy to predict Myspace is doomed.
There's room in the cyberspace scrapyard next to infoseek, friendster, secondlife, joost etc etc etc. And I'd stay away from future offerings like groupon as well - when the business model is so easy to copy, and the only thing that keeps you alive is volume and first mover advantage, it's just a question of time before the tide turns.

[AllyCat7]

10:27 AM on 01/14/2011

Good points

[EcnelisDoogod]

01:06 PM on 01/14/2011

LoL. You left off "Hot Or Not."

[exigent]

02:33 PM on 01/14/2011

and "rate my poop"

[MichaelMcKLA]

04:46 AM on 01/14/2011

Once upon a time, one social networking site dominated the non-collegiate market. They proved to be unable to consolidate their power. When the collegiate networking site opened up to all, MySpace fell into free fall. Feeling they were unable to compete with Facebook, they changed their mission to become an entertainment destination. And it scuked.

Do any of you remember Infoseek, the search engine bought by Disney? That also failed and Disney tried to turn it into an entertainment site as well. And that flopped.

Lesson: When you're ahead, consolidate your power and pretend you have very serious competition, even if you don't. That way, when you are faced with a very serious competitor down the road, you will have the resources, discipline and knowledge to become even better, which will keep your competitor at a disadvantage.

Oh well, crap happens.

[[e-mail]]

08:22 AM on 01/14/2011

Good point

[AllyCat7]

10:30 AM on 01/14/2011

True. And the same advice should be given to "infallible" nations.