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1/13/2011
10:41 AM
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MySpace Confirms Sale Rumors

News Corp. is exploring options for unloading the money-losing social media property, said MySpace.

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News Corp. is seriously considering hanging a "For Sale" sign on its MySpace social networking real estate, the beleaguered company's CEO confirmed on Wednesday.

One day after laying off 47% of its approximately 1,100 employees, MySpace said it is looking into a possible spinoff or sale of the once high-flying Facebook competitor. Mike Jones, the Internet unit's CEO, notified the remaining 500 or so employees of plans for the company's future during a companywide meeting on Wednesday, Rosabel Tao, a MySpace spokeswoman, told Bloomberg.

"News Corp. is assessing a number of possibilities including a sale, a merger, and a spinout," she said. "The process has just started."

Jack Kennedy, VP of operations at News Corp., is handling inquiries from interested buyers, according to Bloomberg.

Rumors of MySpace's sale were fanned late last year when COO Chase Carey said the social media site's "current losses are not acceptable or sustainable," during an earnings call. News Corp., he said at the time, measures success "in quarters, not years."

Tuesday's layoffs occurred across all MySpace divisions, but the site's international units took the brunt of the cutbacks. MySpace replaced its advertising, sales, and content operations in the United Kingdom, Germany, and Australia with local partnerships, relying on a small international team to manage these operations.

"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," Jones said in a statement.

MySpace has taken other steps to lure new users, retain existing accountholders, increase financial viability -- and, potentially, make it more attractive to prospective buyers. In October, the company unveiled a revamped site, one that catered more to its core audience of musicians and younger users. And last month MySpace renewed its ad deal with Google, although new terms were said to be less favorable to the social media site. In November, MySpace extended integration with Facebook.

Since the redesign, MySpace has seen the creation of 3.3 million new profiles, said MySpace's Jones in a statement. The number of mobile users grew 4% between November and December, reaching 22 million, he said.

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