News Corp has begun selling off social networking site MySpace, the company it acquired in 2005 for US$580m. The floundering site is expected to be of interest to private equity firms who may turn it around.
As evinced by the saga of Bebo, which AOL purchased for US$850m and then sold to venture firm Criterion Capital Partners for a sum believed to be less than US$10m, social networking firms don’t seem to do well if they’re bought by media companies of any tradition.
News Corp is understood to have contacted investment bank Allen Co to help it identify bidders.
Interest is expected to come from private equity and venture capital firms, as well as social media businesses, like gaming site Zynga and MocoSpace.
News Corp bought MySpace in 2005 for US$580m, beating off Viacom in the bidding.
However, the rise and rise of Facebook, as well as strategic management blunders that alienated not only its audience but its workforce, have led to a steep decline of the once-powerful social network.
A recent redesign failed to re-invigorate MySpace and as of this month the site had an Alexa ranking of 56 compared to Facebook at No 2.