News Corp. exploring options for Myspace

The reports that News Corp. is looking to sell Myspace, which it bought for 580 million dollars in 2005, only to see it be eclipsed by Facebook, surfaced a day after the social network cut 500 employees, nearly 50 percent of its staff.

Asked about the reports, a News Corp. spokeswoman told AFP: "We're exploring all our strategic options for the business."

The News Corp.-owned Wall Street Journal reported on Thursday that Myspace chief executive Mike Jones told employees in a companywide meeting on Wednesday that News Corp. is exploring a sale, merger or spinoff of Myspace.

Citing a "person familiar with the matter," the newspaper said News Corp. is in the early stages of the process and plans to conduct meetings with potential partners in the near future.

Wedbush Securities social media analyst Lou Kerner told AFP following the layoffs that the move was potentially setting the stage for a sale of Myspace, whose numbers have dwindled as Facebook has grown to over 500 million members.

"I think this is likely a first step to selling the asset," Kerner said.

"It certainly makes sense for News Corp. to take a hatchet to the company as preparation for a sale so when somebody acquires it that's not the first thing that they have to do." he said.

In November, News Corp. president and chief operating officer Chase Carey said the losses at the social network were "unsustainable."

With tens of millions of users, Carey said Myspace still "has the potential to be an exciting business for us" but "we need to make real headway in the coming quarters to get this business to a sustainable level."

(c) 2011 AFP