In an earnings call today, News Corp. officially stated it plans to sell MySpace. During the call, COO Chase Carey said that “now is the right time” to attempt to place the social network “under a new owner.”
MySpace has undergone drastic changes in the past year, including a ground-up redesign, total repositioning as a media company rather than a social network per se, renegotiation of its advertising deal with Google (a key part of the site’s revenue), and a staff shuffling that saw more than one key executive relocating to a new venture.
Moreover, almost half of MySpace’s staff was served pink slips at the beginning of 2011, further reducing overhead.
Yet in spite of these changes, News Corp. said in today’s call that the parent company isn’t entirely pleased with the results. Ad revenues are lower than they once were, and “results at MySpace have been below our expectations,” a company rep said.
“The new MySpace has been very well received by the market and we have some very encouraging metrics,” Carey said. “But the plan to allow MySpace to reach its full potential may be best achieved under a new owner.”
The MySpace renovations have not been cheap for its parent company. In its earnings statement, News Corp. said that while cable and broadcasting revenues are solid, the company “recorded a $275 million pre-tax charge for the impairment of goodwill related to the Digital Media Group and an organizational restructuring at MySpace.”
Rumors of MySpace’s eventual sale to an entity outside the News Corp. family have been swirling for some time. But Carey’s confirmations in today’s call suggest News Corp., which bought MySpace in 2005 for $580 million, would prefer that sale happen sooner rather than later.
MySpace has been, as far as digital properties are concerned, a fixer-upper; and News Corp. has done a lot to fix it up. But are the site’s repositioning, reorganization and redesign enough to make it a good buy for another entity? We’re as curious as anyone to learn how this saga will conclude and what will become of MySpace once its News Corp./Fox Digital era comes to an end.
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