MySpace owner News Corp. plans to sell the struggling social network this week after three years of increasing losses. It may result in over half of the 500 remaining workers losing their jobs.
Currently, there are three competitors waging a war that could cost anywhere between $20 million to $30 million–a huge loss to News Corp., who bought the start-up company in 2005 for $580 million (however, Facebook soon took over the social media world). Debra Aho Williamson, principal analyst from research firm, eMarket, stated that this low estimate is the result of declining visitor numbers, as well as a decrease in overall popularity. Since 2008, MySpace has lost around $1.8 billon (mainly from low advertising revenue). According to tracking firm comScore Inc., MySpace had 74 million visitors from around the world in May, down 32 percent from a year earlier. By comparison, Facebook had 1.1 billion, up 26 percent; Twitter had 139 million, up 54 percent; and LinkedIn had 86 million.
Specific Media, an advertising network; Austin Ventures, an investment fund that is working with MySpace co-founder Chris DeWolfe; and Golden Gate Capital, a private equity fund, are all competing for ownership. According to Fox News, the two main competitors are Specific Media and Golden Gate Capital. They both plan to focus the site on music; however, ABC News stated that the company has yet to name a forerunner.
News Corp. hopes to finish a deal by Thursday, which is also their fiscal year-end.