Summit News

News Corp weighs MySpace options

NEW YORK (Reuters) - News Corp is open to a sale of beleaguered MySpace after a relaunch of the social network as an entertainment site, Chief Operating Officer Chase Carey told Reuters.

A successful revamp of MySpace -- still visited by around 60 million people in October, according to comScore -- could possibly pave the way for a sale.

A sale or partnership are two of a number of options the company would consider for the once valuable social network site, which has suffered in the face of competition from new hot sites like Facebook, which is visited by about 151 million people monthly, and Twitter.

“There are opportunities here to do 20 things (with MySpace) but that doesn’t mean you’re going to do any of the 20. If there’s something there that makes sense you ought to think about it,” said Carey.

MySpace has been the subject of recent speculation that News Corp is seeking to sell the site or partner with other digital media companies such as Yahoo and AOL Inc.

Carey said that a potential merger “would have been largely a pretty tough sale process” before the revamp.

“I think those options would have been pretty limited and I think probably would have undervalued it against what we think it can be,” Carey said on Monday during Reuters Global Media Summit.

But he refused to specify how long News Corp was willing to give MySpace to regain some of its former luster after previously stating he expects MySpace to become profitable within quarters rather than years.

“I’m not going to break down (the number of) quarters,” he said. “It’s not years ... We need to deal with this with urgency.”

MySpace relaunched earlier this month as a social entertainment site rather than a direct social networking rival to market leader Facebook. It has even announced a new partnership with its one-time rival to allow users to merge their entertainment interests from MySpace on to Facebook.

“We have really overhauled the product and made it a very different experience and I think they did a very good job,” Carey said.

News Corp acquired MySpace in 2005 for $580 million after Mews Corp Chief Executive Rupert Murdoch famously swooped in to beat rivals like Viacom in the bidding. And initially the deal paid for itself after Google Inc inked a three-year $900 million search advertising deal in 2006. But since then, the website became increasingly irrelevant as a social network for many users as they migrated to Facebook.

There have also been several management team overhauls in the last couple of years since the original founding CEO, Chris De Wolfe, stepped down in April 2009.

Most analysts on Wall Street do not figure the loss-making MySpace into their key valuation metrics.

“It’s not been integrated much with anything at News Corp, that’s why it’s a free asset to divest easily,” said Miller Tabak analyst David Joyce. “It’s irrelevant as a valuation metric.”

Reporting by Yinka Adegoke and Jennifer Saba; Editing by Derek Caney, Phil Berlowitz