Murdoch mulls over MySpace sale

20 Jun 2007

Social networking site MySpace lies in limbo as Rupert Murdoch’s News Corporation is considering selling the popular portal to Yahoo!.

MySpace, with user accounts numbering over 100 million, was bought by News Corp in 2005 for US$580m and would add a much-needed social networking element for Yahoo! to contend with its main competitor Google.

News Corp is putting MySpace on the table as part of a deal which would involve the media giant acquiring a 25pc stake in Yahoo!’s estimated worth of US$37bn.

In light of this week’s surprise shuffle in Yahoo! headquarters, seeing six-year-long CEO Terry Semel stepping down to be replaced by the co-founder Jerry Yang, analysts predict Yahoo! is in flux and the time is ripe is snap up MySpace.

The Times London, owned by News Corp, reported that its parent company was seeking a greater online presence through an established company like Yahoo!.

If Yahoo! was to give up 25pc of its overall value, US$9.25bn, in exchange for MySpace, it remains to be seen who would come out on the wrong side of such a deal.

MySpace has been valued at an estimated US$20bn by Brad Greenspan, former chairman and CEO of Intermix Media, original owner of MySpace.

However, rival site Facebook has been gaining ground on MySpace in the US and due to recent innovation is seen as a contender for the social networking crown, which could potentially devalue MySpace in the long term.

By Marie Boran