News Corp. to dump beleaguered Myspace

In the latest of a long series of blows to Myspace, The Wall Street Journal reported that News Corp is on the verge of selling the once dominant social network in a deal that could include the laying off more than half of the troubled company’s staff.

The newspaper, citing a “person familiar with the matter,” reported that there were two leading bidders for Myspace — the digital ad-targeting firm Specific Media and private equity firm Golden Gate Capital.

The News Corp.-owned Journal said a deal could be announced as early as Wednesday, and would include shedding more than half of Myspace’s 500 strong staff.

The newspaper said the buyer would pay significantly less than the $100 million News Corp. had hoped for, and that the Rupert Murdoch-owned megalith would continue to hold a small stake in Myspace.

Technology blog All Things Digital, also owned by News Corp., reported that the current offerings for Myspace are in the $20 million to $30 million range.

News Corp. paid $580 million for Myspace in 2005. It was the leading social network at the time but has since been eclipsed by Facebook.

The Journal said Specific Media and Golden Gate Capital were the leading bidders but several others remain in the mix, including two groups with ties to Myspace founders Chris DeWolfe and Tom Anderson.

DeWolfe has been in talks to acquire Myspace as part of a group backed by Austin Ventures, the newspaper said, while Anderson is part of a group backed by Criterion Capital Partners.

News Corp. chief operating officer Chase Carey put Myspace on notice in November, saying the losses at the social network were “unsustainable” and the company revealed in January that it was for sale.

News Corp. does not break down results for Myspace in its earnings but the “other” segment, which includes the social network, reported a second quarter operating loss of $156 million, $31 million wider than a year ago. — AFP, with additional staff reporting.