News Corp. is exploring a sale of spin-off of troubled social entertainment site MySpace, Reuters reported. News Corp. has hired Allen & Co. to help with the exit, and is reportedly expecting the most interest in the site to come from private equity and venture investors. Myspace paid a whopping $580 million for MySpace in 2005.
(Reuters) – News Corp has kicked off the process to explore the sale or spin-off of its troubled social entertainment site, Myspace, a person familiar with the talks said on Thursday.
The media conglomerate has received early interest from around 20 parties so far and expects to receive more inquiries as the process develops in coming weeks.
Reuters reported earlier this month that News Corp had tapped boutique investment bank Allen & Co to aid with the process.
News Corp executives and bankers from Allen & Co will start talking to interested parties in the second week of March the person said.
Most of the buyout or spin-off interest is expected to come from financial parties such as private equity and venture capital. But possible strategic interest could come from parties such as mobile social networking site MocoSpace and gaming site Zynga. The person said Zynga is currently not in talks with News Corp about Myspace. MocoSpace said earlier this month it was interested in buying Myspace.
News Corp acquired Myspace in 2005 for $580 million after News Corp Chief Executive Rupert Murdoch famously swooped in to beat rivals such as MTV owner Viacom Inc in the bidding. But since then, the loss-making website has become increasingly irrelevant as a social network for many users who have migrated to Facebook. (Reporting by Yinka Adegoke; editing by Andre Grenon)