Media giant News Corp. is on the verge of selling Myspace this week for a fraction of the $580 million it paid for the social network in 2005.
Acquisition talks for Myspace have narrowed to a handful of bidders, including advertising-targeting firm Specific Media and private-equity firm Golden Gate Capital, The Wall Street Journal reported Tuesday, citing an unnamed person familiar with the matter.
Also in the hunt: Myspace co-founders Chris DeWolfe and Tom Anderson, a person with knowledge of the negotiations told USA Today. The source declined to be named because the person is not authorized to speak on behalf of News Corp. The asking price for Myspace is less than $100 million, the person said.
As part of any deal, which could come as early as today, Myspace will shed more than half its staff of about 500, the Journal reported.
Myspace spokeswoman Rosabel Tao declined to comment.
Myspace's spectacular rise and fall is the latest cautionary tale about a tech company that lost its way and failed to adapt when presented with a nimble upstart in its case, Facebook.
"About 18 months ago, I heard Myspace as a verb for the first time," says Peter Shankman, a social media expert. "It came to mean an entity that skyrockets to fame so high that their fall back to Earth is nothing short of meteor-like proportions."
As recently as 2008, Myspace hauled in $604 million in global advertising revenue. By 2009, it had fallen to $470 million, while Facebook's slice soared to $738 million, topping Myspace for the first time, eMarketer estimates.
This year, eMarketer says Myspace will ring up $184 million in global ad revenue, down 36% from 2010; Facebook will more than double, to $4.1 billion.
Myspace's fading fortunes come as Google introduces its new social network, Plus; Facebook readies a new feature next month; and Twitter continues to flourish.
A sale was a last resort for Myspace, which redesigned its website earlier this year to target the 13- to 34-year-old crowd. Its audience has plunged to 34.9 million unique monthly visitors in the U.S. in June, from 67.2 million in February 2010, says ComScore.
Facebook, with some 750 million members worldwide and an estimated market value of $70 billion, is gearing up for an initial public offering in 2012.
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