Apparently Rupert Murdoch's News Corp. isn't all that into "agile and flexible." Or maybe it's the "unprofitable" part of MySpace that's prompting its parent company to unload the troubled former leader in social networking. (Also see: Myspace as cautionary tale)
The Wall Street Journal reports that Myspace chief executive Mike Jones, fresh from announcing the layoffs of 500 employees, or 47 percent of Myspace's total workforce, told undoubtedly rattled survivors that News Corp. "is exploring a sale, merger or spinoff of the social-media website." Sale, merger or spinoff, News Corp. clearly is desperate to dump Myspace, which it bought for $580 million in 2005. But a sale strikes me as the least unlikely outcome, unless News Corp. is willing to accept a fraction of it purchase price. It certainly isn't as though there are buyers lined up around the block for a web property that over the past three years has been shrinking faster than Sarah Palin's presidential prospects. Once the top social networking site in the world, Myspace was eclipsed in late 2008 by Facebook and has been losing users and money ever since. It laid off 30 percent of its workforce in June 2009 and last fall launched a redesign intended to transform the site from an also-ran social networking platform to an entertainment sharing site for young users. Announcing the layoffs earlier this week, Jones touted the diminished Myspace as an agile and flexible organization in which a culture of entrepreneurship and innovation can flourish. Now it sounds as though News Corp. isn't willing to wait out the attempted turnaround and either wants to wash its hands of Myspace or find a partner to shoulder the burden of losses and lowered expectations. The WSJ reports that News Corp. "is in the early stages of the process and plans to conduct meetings with potential partners in the near future, a person familiar with the matter said." That's unfortunate for News Corp., since the Myspace story isn't likely to become more compelling as time goes on. My advice (based on personal experience) to Myspace employees: Don't wait around for some happy outcome to materialize. It's probably not in the cards.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.