News Corp sells MySpace at a loss
Source: Bloomberg News |
July 1, 2011, Friday
|
Print Edition
Print Edition
NEWS Corp agreed to sell MySpace to Specific Media Inc for a fraction of what it paid six years ago, ending its efforts to turn around the money-losing social networking business.
News Corp will receive US$35 million, including a 5 percent stake in Specific Media, according to a person with knowledge of the situation. Specific Media announced the sale in a statement yesterday, without providing the terms.
The accord rids News Corp Chairman and Chief Executive Officer Rupert Murdoch of a website that lost its lead in social networking to Facebook Inc after being acquired in 2005 in a US$580 million deal.
The company had sought about US$100 million for MySpace after Chief Operating Officer Chase Carey said in February he wanted a deal completed by the June 30 end of the parent company's fiscal year.
"It gets MySpace off their books finally, which has a certain value," said Michael Gartenberg, an analyst at Gartner Inc. "This shows how fast things change on the Web and how quickly US$580 million in value can vanish."
MySpace CEO Mike Jones will depart after a two-month transition that includes "significant" job cuts.
News Corp will receive US$35 million, including a 5 percent stake in Specific Media, according to a person with knowledge of the situation. Specific Media announced the sale in a statement yesterday, without providing the terms.
The accord rids News Corp Chairman and Chief Executive Officer Rupert Murdoch of a website that lost its lead in social networking to Facebook Inc after being acquired in 2005 in a US$580 million deal.
The company had sought about US$100 million for MySpace after Chief Operating Officer Chase Carey said in February he wanted a deal completed by the June 30 end of the parent company's fiscal year.
"It gets MySpace off their books finally, which has a certain value," said Michael Gartenberg, an analyst at Gartner Inc. "This shows how fast things change on the Web and how quickly US$580 million in value can vanish."
MySpace CEO Mike Jones will depart after a two-month transition that includes "significant" job cuts.
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