In a deal influenced by its loss in Q2 of 2011, the world's third-largest media corporation, Murdoch's News Corp has sold its social networking site MySpace to Specific Media, an online advertising company.
In 2005, Rupert Murdoch's News Corp acquired MySpace for $580m, but the site rapidly lost its users and advertisers to rival social networks like Facebook and Twitter.
The present sale terms have not been disclosed, but there were unconfirmed reports that the deal is worth $35m.
Specific Media keen to strengthen its digital technology
Singer Justin Timberlake is likely to take a stake in the business. He will perform "a major role in developing the creative direction and strategy for the company moving forward," Specific Media said.
Specific Media is expecting to unite its services with MySpace platform to steer into a new era of digital advancement.
The Irvine-based Specific Media was established in 1999 by three brothers - Tim, Chris and Russell Vanderhook. The company helps marketers, advertisers and agencies with compound delivery channels to meet users on the internet.
Established in August 2003 by Tom Anderson and Chris De Wolfe, MySpace was a pioneer in connecting friends and fans with one another and with their favorite artists and bands.
MySpace dominated the social networking business till 2008 before being eclipsed by rival services offering exciting third-party integrations for users in their services.
MySpace lost its users rapidly
In August 2005, while MySpace was enticing around 21.8 million US visitors each month, Facebook was way behind with 8.3 million US users.
According to the tracking service ComScore, MySpace reached its pinnacle in 2008 with nearly 80 million users in the United States, almost twice of Facebook.
While the growth was mounting rapidly, MySpace was not really able to scale and handle the swarm of users flocking on the website. The inability of MySpace to hold visitors on its site forced users to go with Facebook.
Meanwhile, Facebook had launched its third-party developed programs like FarmVille game to attract and engage users on the site.
Chase Carey, News Corp's CEO accepted in November that the losses at MySpace were "unsustainable".
By May 2011, MySpace’s US user count reduced to 34.9 million, half-evaporated since 2008, while Facebook was cruising along with nearly 157 million users. Facebook has around 700 million global users.
News Corp suffered heavy loss in 2011’s Q1&Q2
The News Corp experienced a ‘segment operating’ fall of $165 million in the first quarter of 2011. The company attributed the loss to declines at MySpace.
Though News Corp has not disclosed MySpace’s results in the second quarter, the "other" segment, that includes MySpace, reported a $156m loss.
This acquisition is a result of the current loss and is likely to upset millions of MySpace lovers worldwide.