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Myspace Sale Nearer To Closing

June 10, 2011

The former social networking darling Myspace, long since abandoned by the masses has been for sale and the only serious parties to a buyout remaining are an investor group involving the chief executive of games publisher Activision Blizzard, Bobby Kotick, The Guardian is reporting.

Rupurt Murdoch’s News Corp, paid $580 million for Myspace in 2005 in a deal that many in the tech industry saw as a gross over-valuation. For a few months afterwards, Myspace continued to grow.

Technical issues with slow load times for pages, an overabundance of trashy profiles and spam originating from disreputable Myspace members quickly cooled the site for many users.

This corresponded to the rise of Facebook with its cleaner interface, improved privacy settings and improved social aspect of network media. More recently, Myspace has attempted to redefine itself as an online home for bands, celebrities and Hollywood promotions.

Facebook recently announced it had nearly 700 million users, while Myspace can only claim up to 77 million. In January Myspace cut 500 jobs, nearly half its workforce and in May 2009, cut about 1,100 jobs and closed some of its international offices.

Myspace had hoped to find a buyer willing to pay about $100 million for it, but sources said that it was unlikely to achieve that target.

Kotick’s involvement is personal and nothing to do with Activision at this stage. Kotick was approached by the investor group in recent weeks and has not yet made a full commitment to the Myspace project, one of the people said. If he does get involved his stake is likely to be very small, two of the sources claim.

Under the terms of the proposed deal News Corp is understood to want to retain a 20% stake in Myspace.

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