NewsCorp. On Track to Sell MySpace by Mid-Year
While the media buzzes about Facebook's new $500 million investmentfrom Goldman Sachs and Digital Sky Technologies and $50 billion valuation, MySpace is at the other end of the spectrum, facing more layoffs and on the auction block.
Over the past few days News Corp has started taking a slew of meetings about selling MySpace and they have many more meetings planned in coming weeks.
Sources confirm that the company plans to lay off 50 percent of MySpace's 1,100 employees in mid-January. But the company's likely to do many more layoffs than that.
Sources close to negotiations of a sale say those layoffs will be insufficient to lure potential buyers many more layoffs would be necessary to demonstrate to investors that the company's on a path to profitability.
But with layoffs and talks underway, News Corp is on track to complete a sale of MySpace by mid-year.
So who could buy MySpace? News Corp will surely talk to over a hundred companies, venture capitalists and private equity funds.
Social gaming company Zyngahas been talked about as a potential buyer for a number of reasons. The companies have a close connection MySpace's former CEO now works at Zynga. And the company's sky high valuation means it would have no problem using stock to make a purchase larger than MySpace.
And then there are the slew of private equity and venture capital firms who could see an opportunity in slimming down and cleaning up MySpace.
Of all the potential PE and VC options, Silverlake Partnersjumps out because it recently bought a majority stake in Skype from eBay â?¬. This would be another case of buying a tech company from a public giant.
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