News Corp. has finally managed to offload the cash drain that is MySpace, but not before slashing their sale price from $100 million to a much lower $35 million.
According to AllThingsD, the deal includes reducing staff by half, and the blog reports that Myspace CEO Mike Jones and other key staff will probably only stay on for an “interim period” before leaving the company for good. (Could you imagine a more stressful job situation than working at a company bleeding cash like MySpace?)
The staff provisions and specific price were teased out yesterday by the Wall Street Journal, where a sale price of between $30 million and $40 million was predicted. So who bought MySpace? Specific Media, the purchaser, commented on the deal after it became official:
“Myspace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online.”
The last time MySpace changed hands, it was the News Corp. purchase in 2005- for $580 million. The site has since undergone a spectacular transformation- becoming a cautionary tale in tech about overvaluation as well as remaining in touch with your user base. MySpace users fled the site in droves for the cleaner, more connected rival social network Facebook, and the site has been in steady decline for years.
Do you think Specific Media can turn MySpace around, or is the site too tainted to be redeemed? What do you think MySpace’s future holds?