In News Corporation is trying its best to drive a hard bargain, but according to sources it is unlikely to get the price of $100 million for the also-ran in the social networking space, MySpace. Now low-paying and little known buyers have started competing the ailing networking site for prices as low as $20 million and $30 million.
MySpaces traffic has been falling faster than meteor cruising through space on its way to earth. Between mid 2009 and 2010, more than half of the sites visitors simply evaporated. This forced the site to use a rather unprofessional strategy to lure back visitors by allowing them to sign-in by using their Facebook ID. This plan to did not work and the traffic kept disappearing.
Ultimately News Corporation, which also owns FoxNews.com and NewsCore, had no alternative except to sell the site. The site still has around 40 million active users worldwide, so with an improved product and better advertising, things can potentially be turned around. As a part of the deal, MySpace will have to make significant cuts in staff and operating costs. Majority of the websites international operations have already been shut down and hundreds of employees have lost their jobs.
Chances are that MySpace will get sold to Specific Media or Golden Gate Capital. According to reports, News Corporation wishes to retain a small percentage of the company, while handing over operational control and majority ownership to the successful buyer. The deal is expected to close by the end of this month.
It was in year 2008 that News Corporation had bought MySpace for $580 million. During the heydays of MySpace, the asset was briefly valued at $12 billion when News Corp attempted to merge it with Yahoo in 2007. However, visitors soon started flocking to Facebook and MySpaces fortunes took a nosedive. In three years, MySpace found itself at the rock bottom of the social networking heap.
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