Myspace was purchased by digital ad network Specific Media on Wednesday for $35 million and a fraction of the $580 million the company’s previous owner News Corp paid for it. It present owner News Corp will keep a 5-10% share of the company, though the deal is not yet finished and Specific has been somewhat quiet on any consumer-facing news, but this will surely change that fact. Justin Timberlake has joined the Myspace team as part-owner and will supposedly play a major role………..
MySpace has been sold by its owner News Corp. to digital media company Specific Media for a rumored $35 million, a deal that clinches the position of Facebook as the lord, king and master of social networking world. As part of the deal, about half of MySpace‘s 400-odd employees will lose their jobs while News Corp. will take a minority equity share (reportedly something between 5-10 percent) in Specific Media. The deal will also see MySpace CEO quit his post after a 2-month transitory period. “My time here at MySpace represents the most engaging and challenging time of my professional career,” Jones wrote. “I have found our team to be comprised of the best people I have come across in our industry.” Specific Media is very happy about the deal as it got MySpace for a steal. “MySpace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online. “There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest,” he said. “We look forward to combining our platforms to drive the next generation of digital innovation,” CEO Tim Vanderhook said in a statement.
The deal will give Specific Media instant access to the data of 30 million-odd MySpace users for targeted advertisements besides giving the company a media platform of its own from where it can sell its ads. Though the price tag represents a fraction of what News Corp. bought MySpace for, market analysts said News Corp. is better off by putting the loss making site on the block. News Corp. bought MySpace for $580 million in 2005 as part of its ongoing efforts to drive up digital media traffic. According to data from Compete.com, MySpace pulled in 30.79 million unique visitors last month, down 6.34 percent compared with the previous month and down 54.47 percent on a year-on-year basis. However, the sale of MySpace is not new and in fact as early as February this year, it was rumored that MySpace would be put up on the block. At that time, News Corp. CEO Chase Carey had said that it was the right moment to sell off MySpace to a new buyer in order for the site to “reach its full potential.” And, when News Corp. failed to find a potential suitor, it also reduced MySpace‘s total workforce by 47 percent or around 500 employees to make MySpace look more attractive to suitors. And, though a loss of around $550 million is a huge amount, things weren’t this bad five years back.