Finally, News Corp has (kind-off) decided to abandon the sinking ship and has triggered the ‘efforts of saving left-over’ from the prospective of MySpace – Once an online Social media Titan. Around six to seven private equity firms and companies are expected to submit their bids by this weekend towards taking over the ownership of MySpace from News Corp., according to people familiar to the matter. In Early February this year, we had reveled that News Corp is intending to get rid of MySpace.
As per WSJ, News Corp is expecting to pocket minimum $100 million or more from this deal. Though, it will only record the loss for the company as it bought MySpace at whooping $580 million back in 2005. However, a successful deal will avoid all further operational losses for News Corp which is incurring to maintain MySpace. Alone in last quarter of 2010, News Corp recorded net $156 million operational loss from MySpace due to constantly shrinking traffic and ad revenue.
Sources has claimed that many well known equity firms like Criterion Capital Partners who owns online video portal Vevo and Bebo, Redscount Ventures and H. Lee Partners are interested in owning MySpace. Surprisingly, it’s not very clear whether any company like Google or Yahoo will stand among bidders for this deal. Google currently holds an Ad deal with MySpace which has helped, till an extent, to survive the creditability of MySpace last year.
Last Year, MySpace went through major “transformation” on functional and visual grounds. After failing to compete with Facebook and Twitter, MySpace had decided to divert its focus from social networking to social entertainment industry. Despite of their desperate attempt to charm music enthusiasts MySpace’s traffic dropped 49% from a year earlier to 36.1 million unique U.S. visitors in March, its lowest monthly total since February 2006, according to comScore Inc.
So, what’s there with MySpace which is still charming half a dozen bidders ? The core of interest is in the database which still holds the information of about half a million people across the globe. For any company, gaining instant access to more than 500 million user’s information plus narrowed by active visitors on site is not a bad deal at this cost – conditionally company can capitalize on such huge info bank in right direction.
People familiar with the matter say that News Corp. expects to be able to announce a deal around June this year.