News Corp. Takes Huge Loss, Selling Myspace For $35 Million

Filed by KOSU News in Business.
June 29, 2011

Back in 2005, Rupert Murdoch’s News Corp. bought Myspace for a stunning $580 million. Today, News Corp. sold the struggling social network to an advertising targeting firm for $35 million.

The Wall Street Journal reports:

Specific Media will pay $35 million in stock and cash for Myspace, according to people familiar with the matter, well below the $100 million News Corp. was seeking for the troubled site. News Corp will retain a stake of less than 5% in the site, the people said.

“Myspace is a recognized leader that has pioneered the social media space,” said Tim Vanderhook, Specific Media CEO, in a press release. “The company has transformed the ways in which audiences discover, consume and engage with content online. There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest.”

If you don’t remember, before Facebook came around, Myspace was the dominant social network on the Web. At its peak, Myspace had 70 million unique monthly visitors, but, according the to The New York Times, the site could not keep up with Facebook, which overtook Myspace two years ago and now boasts 500 million active users.

The Times adds:

“It’s a shame that MySpace’s value has diminished so severely since the acquisition; MySpace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,” Richard Rosenblatt, the chairman of MySpace at the time of the sale to the News Corporation, said in an e-mail.

Instead of envy, the News Corporation bet on MySpace now provokes punchlines. Tom Freston, who was fired as the chief executive of Viacom in part for failing to buy MySpace, joked in an interview with CNBC earlier this year that “I’m still waiting for a thank you note” from the Viacom chairman, Sumner Redstone.