MySpace sold for $35M, mostly in stock

LOS ANGELES - - News Corp. has sold struggling social networking site MySpace for a reported $35 million. The deal values MySpace at a fraction of what News Corp. paid for the site six years ago.

The sale to online advertising network operator Specific Media is expected to close later Wednesday, a day before the end of News Corp.'s fiscal year. News Corp. will maintain less than a 5 percent stake in the company.

The person was not authorized to speak publicly and spoke on condition of anonymity. Specific Media confirmed the acquisition but not the terms of the deal Wednesday.

Reuters quotes an anonymous saying that over half of the approximately 500 people working at the social network will lose their jobs after the sale.

"There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest," said Specific Media CEO Tim Vanderhook, in a statement. "We look forward to combining our platforms to drive the next generation of digital innovation."

Specific Media, based in Irvine, California, was founded in 1999 by brothers Tim, Chris and Russell Vanderhook.

MySpace CEO Mike Jones said the new owners plan a series of restructuring initiatives, including "a significant reduction in our workforce." He did not offer further details, other than to say he would be leaving the company within the next couple of months after assisting with the transition.

This will not go down in the annals as one of the best deals ever pulled off by media tycoon Rupert Murdoch. News Corp. bought MySpace for $580 million in 2005, but users and advertisers have fled the site for other hotter social networks like Facebook and Twitter.