News Corp offloads MySpace to Specific Media & Justin Timberlake

Stuart Corner
Thursday, 30 June 2011 08:43

IT Industry - Deals

Digital media company Specific Media has bought ailing social networking site MySpace from News Corporation, and Emmy and Grammy winning artist Justin Timberlake will take an ownership stake and play a major role in developing the creative direction and strategy for the company.

As part of the agreement, News Corporation will take a minority equity stake in Specific Media. No further details of the deal are being disclosed. Specific Media and Timberlake say they will unveil their vision for the site at a press conference later this Northern summer.

Timberlake hinted that MySpace would become focussed around music and other art forms, saying: "Art is inspired by people and vice versa, so there's a natural social component to entertainment. I'm excited to help revitalise Myspace by using its social media platform to bring artists and fans together in one community.

"There's a need for a place where fans can go to interact with their favourite entertainers, listen to music, watch videos, share and discover cool stuff and just connect. Myspace has the potential to be that place."

Specific Media said that it would leverage the Myspace social networking infrastructure to "deploy socially-activated advertising campaigns, enabling brands to turn their campaigns viral by allowing users to share their favourite ads with friends."

Specific Media was founded in 1999 by Brothers Tim, Chris and Russell Vanderhook to address the needs of the burgeoning online advertising space. Since then, the company has developed into one of the world's largest online advertising companies, with capabilities spanning addressable advertising, original programming and cross-media distribution.

It says that, by bringing its advertising technology and Fortune 500 client base to Myspace it will create "a digital hub where consumers, content and brands connect based on mutual interest and relevance."

MySpace was the leading social networking site when News Corp paid $US80m for it in 2005, but was overtaken by Facebook in 2008 and has declined steadily since then. It laid off 30 percent of its workforce in June 2009 reducing staff numbers to 1000. According to Wikipedia by June this year it was down to 400 employees and announced plans to lay off at least 150 employees and to put another 150 employees on a transition plan so they could work temporarily while looking for another job.

Wikipedia said: "In late February 2011, News Corp officially put the site up for sale, which was estimated to be worth $US50-$US200m. Losses from last quarter of 2010 were $US156m, over double of the previous year, which dragged down the otherwise strong results of parent News Corp. The deadline for bids, May 31, 2011, passed without any above the reserve price of $US100 million being submitted."