updated 06:45 am EDT, Mon June 6, 2011
MySpace said to be nearing partnership deal
News Corp, the owner of MySpace is getting closer to signing a deal for MySpace since formally opening a bidding process in April. However, it appears that instead of an outright takeover, any deal will be in the form of a major partnership. News Corp, which paid $580 million for MySpace in 2005 had been hoping for offers at around $100 million for the struggling website, but has not received any credible offers in that vicinity.
While MySpace still drew 37.1 million unique visitors to its site in April, this was down 46% from the same period last year. Worse, News Corps digital media unit, which includes MySpace, just reported a quarterly operating loss of $165 million.
Since the News Corp takeover of MySpace, which was once a major social networking hub, Facebook and Twitter have overrun it. Attempts to remake the site into a media and entertainment site have failed to turn around its declining audience.
One of the potential bidders, who along with others, has been conducting due diligence by investigating the MySpace books was surprised to discover the amount of money still being spent by MySpace. Among the expenditures was $60,000 a month for parking and $800,000 a month for lawyers fees.
Despite this, it is likely that MySpace will form a strategic partnership in a deal that is said to be wrapped up by the end of June. [via Wall Street Journal]