News Corp. Sells MySpace For $35 Million
Up To Half The Staff Laid Off
June 29, 2011 at 2:00 PM (PT)
NEWS CORP. has finally sold MYSPACE, to advertising targeting firm SPECIFIC MEDIA for approximately $35 million plus a 5% stake in the entity, the NY TIMES reports. In the process, "many" -- some media sources speculate up to half -- of the company's 400 employees were let go.
NEWS CORP. bought the once-powerful social network for $580 million six year ago, only to see it fall from grace behind FACEBOOK. Fortunately for RUPERT MURDOCH's conglomerate, most of its original investment was recouped when it struck an advertising deal with GOOGLE soon after it acquired MYSPACE. Even so, NEWS CORP. had been trying since last winter to sell the company, after the annual revenue it generated dropped from $605 million to $183 million.
What went wrong? THE TIMES cites a blog post by LEE BRENNER, director of MYSPACEs now-defunct "Impact" section, who wrote, "I’m sure most employees (former or current) will argue that it was poor management, or a need to hit revenue targets once NEWS CORP. took over, or a bottleneck in the technology department, or lack of resources given to their division, or a poor public relations effort, etc., that set the course of MYSPACE’s downfall. Any number of these could be true. I suppose we’ll never know for sure. It is most likely a combination of these factors, along with a ‘low attention span’ public. It probably didn’t help to be doing business, and trying to grow, along with all of these issues, in the midst of a global economic crisis."