Bloomberg News

News Corp. Said to Weigh Cash-Stock Offers for Myspace Site

June 28, 2011

(Updates with Specific Media comment in fifth paragraph.)

June 28 (Bloomberg) -- News Corp., looking to conclude a sale of Myspace this week, is weighing two cash-and-stock offers for the social-networking service, according to a person with knowledge of the situation.

News Corp. is in talks with Golden Gate Capital, a San Francisco-based private-equity company, and Specific Media, operator of an online advertising network, said the person, who wasn’t authorized to speak publicly.

The final price will include a continued equity stake in Myspace for Rupert Murdoch’s New York-based News Corp., according to the person. The offers are in the $20 million to $30 million range, plus a possible continuing equity stake, News Corp.’s AllThings D reported today. News Corp. acquired Myspace in 2005 with the $580 million purchase of Intermix.

As part of the deal this week, Myspace may cut more than half of its staff, AllThings D reported. Rosabel Tao, a spokeswoman for Beverly Hills, California-based Myspace, declined to comment.

Specific Media, based in Irvine, California, declined to comment, said Meredith Obendorfer, an outside spokeswoman for the company founded by Tim and Chris Vanderhook. Barry O’Sullivan, an outside spokesman for Golden Gate, declined to comment.

Mike Jones, chief executive officer of Myspace, told employees in January that News Corp. intended to spin off or sell the website. Jones redesigned Myspace in October to build online communities around films, TV shows and music.

Overseeing Process

Jack Kennedy, executive vice president of operations for News Corp.’s digital group, has overseen the process, while Allen & Co., a New York-based investment bank, marketed the website to potential buyers.

Results for Myspace aren’t broken out in News Corp. results. The division that includes Myspace lost $575 million in News Corp.’s fiscal year ended June 30, 2010, according to company reports. During that period, Myspace lost less than $100 million, the website said in an e-mail in October.

News Corp., controlled by Chairman and CEO Rupert Murdoch, climbed 26 cents to $17.18 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has risen 18 percent this year.

--With assistance from Jason Kelly in New York. Editors: Donna Alvarado, John Lear

To contact the reporter on this story: Andy Fixmer in Los Angeles at

To contact the editor responsible for this story: Anthony Palazzo at

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