News Corp. Is Considering Selling Myspace
After reports surfaced that News Corp. is considering selling Myspace, a News Corp. spokeswoman has confirmed that the company is exploring “strategic options” for Myspace. News Corp. purchased Myspace in 2005 for $580 million. Since then, the social networking site has struggled in comparison to its competitor, Facebook.
Reports that News Corp. was looking into options for Myspace surfaced after the social network cut 500 employees, which is nearly 50 percent of its staff. The Wall Street Journal, also owned by News Corp., reported the Mike Jones, chief executive of Myspace, had told employees in a companywide meeting on Wednesday that News Corp. was exploring a sale, merger, or spinoff of Myspace.
According to a person familiar with the matter, News Corp. has only just begun the process. The company plans to meet with potential partners in the near future.
Lou Kerner, a Wedbush Securities social media analyst, felt the layoffs were a likely indication that a sale of Myspace is possible. "I think this is likely a first step to selling the asset," Kerner said. "It certainly makes sense for News Corp. to take a hatchet to the company as preparation for a sale so when somebody acquires it that's not the first thing that they have to do." he said.