News Corp. Sells MySpace for $545 Million Loss
Specific Media pays $35 million to acquire the once-mighty social networking site.
| Posted Wednesday, June 29, 2011, at 5:02 PM ET
Rupert Murdoch’s News Corp. has finally found a buyer for MySpace, but the $35 million sale price is only a fraction of what the company had been asking.
Advertising network operator Specific Media and News Corp. finalized the deal Wednesday, allowing Murdoch's company to move the once-mighty social networking site off its books before its fiscal quarter ends on Thursday.
News Corp. had reportedly been hoping to sell the company for at least $100 million.
The $35 million price tag is either laughably high or embarrassingly low, depending on where you’re sitting. It is $545 million less than Murdoch paid for the site only six years ago. But that was when MySpace was the new Friendster, back when such a comparison was a flattering one. (Yes, we know we’ve used that joke before.)
Since thenv the company has fallen on hard times by pretty much every Web metric. It has lost active users, traffic, and, consequently, ad revenue.
The New York Times has more:
The sale closes a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it bagged MySpace in 2005. At that time MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook, which overtook MySpace two years ago.
The market research firm eMarketer estimates that the site will earn about $183 million in worldwide ad revenue this year, down from $605 million at its peak, when the site introduced many Web users and many advertisers to the concept of social networking.
It isn’t exactly clear what Specific Media’s plans are for the site. In preparation for the sale, many of MySpace’s roughly 400 employees were dismissed earlier Wednesday.
MySpace, however, still has some allure, given its name recognition and remaining 50 million or so active users. Among the companies that reportedly were interested in acquiring the site were Thomas H. Lee Partners, Redscout Ventures, Criterion Capitol Partners, and Providence Equity.
