News Corp. narrows bidders for MySpace
Orange County advertising network Specific Media and Bay Area private equity firm Golden Gate Capital are finalists in the bidding for struggling social network Myspace, people familiar with the matter confirm.
News Corp. had hoped to fetch as much as $100 million for the once-dominant Myspace, but bidding is now in the $20 million to $30 million range in a cash and stock transaction, AllThingsDigital reports. The media conglomerate, which is controlled by Rupert Murdoch and paid $580 million for Myspace in July 2005, would retain a minority stake in the site, a person familiar with the matter has said.
The pending acquisition, which could close as early as this week, is expected to result in another round of layoffs at the Beverly Hills-based MySpace -- as many as half the remaining 500 employees.
Names of other potential bidders have recently surfaced, including Myspace co-founder Chris DeWolfe, and an investor group that was courting a personal investment from Activision Blizzard Inc. Chief Executive Bobby Kotick.
Both these well-known digital entertainment figures have fallen to the background in discussions for now, as new front-runners emerged, said people with knowledge of the matter.
Specific Media of Irvine was founded in 1999 by Tim Vanderhook and his brothers, Chris and Russell. The company helps brands buy ads online, on mobile devices and on Internet-connected TVs. The online ad network has flown under the radar, but counts among its senior executives a Myspace veteran, Jason Knapp. He previously worked for the Fox Audience Network, the online advertising unit of News Corp.
A spokeswoman for Specific Media did not respond to a request for comment.
The private equity firm Golden Gate Capital, which is based in San Francisco, has about $9 billion under management and has been an active investor in the consumer sector. Over the last five years, it has invested in or acquired more than 20 brands including Herbalife, Eddie Bauer and Romano's Macaroni Grill.
A Golden Gate Capital spokesman declined comment.
It is unclear what Specific Media or Golden Gate Capital would do to turn around the struggling MySpace, which was once the dominant social network but has hemorrhaged millions of users and, with it, advertising revenue.
Researcher eMarketer projects the site's ad revenues are on track to fall to $184 million this year, from $470 million in 2009.
-- Dawn C. Chmielewski
Graphic: Facebook and Myspace monthly users. Credit: comScore