MySpace sold for $35m

30th June 2011

This is a fraction of the $100m its parent company was seeking for the ailing social network and millions less than its value five years ago – in sharp contrast to a new generation of internet firms attracting sky-high valuations.

News Corp, which will retain a small holding, bought MySpace in 2005 for $580m, says the report, but the social network has been crushed by the success of Facebook, which passed MySpace in number of users two years ago. More than half of MySpace's 500 remaining members of staff are expected to go as part of the deal.

The deal will see Justin Timberlake take a stake in the social networking site and shape its strategy alongside Specific Media, adds the Daily Telegraph.

"There's a need for a place where fans can go to interact with their favourite entertainers," Mr Timberlake said in the Daily Telegraph. "I'm excited to help revitalise MySpace by using its social media platform to bring artists and fans together."

Datasmog comments on the report: "It's demise was only a matter of time. Unless it's drastically overhauled I can't see why anyone would choose to use it over Facebook or a proper web page or blog."

MySpace, which started as a site on which users could share their interest in pop and rock bands, has in the last three years been eclipsed by the explosive growth of competitor Facebook. MySpace has been bedevilled in recent years by confusion over its strategy according to analysts.

Rory Cellan-Jones, BBC technology correspondent, says on his blog: "If you look back through the history of social networking you will see MySpace as just one chapter in the evolution of the idea – and in retrospect it looks like a diversion.

"A business founded by people from the entertainment industry, rather than the geeks who started Facebook or Twitter, ended up struggling to make its technology work as it grew.

"Then there was the decision to make it a place where users were anonymous, and could assume any identity they fancied. That worked at first, but when your real friends with their real names started popping up on Facebook, millions decided that was a better way to network."

He adds: "The world has chosen Facebook, but the likes of LinkedIn and Twitter are offering bespoke services – fast news or business networking – which appeal to smaller communities."

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