Pop star Justin Timberlake is part of a group that said Wednesday it will buy MySpace from News Corp., a bid to add some cool to a social network that has been losing it for some time.
Timberlake will become a part owner and play “a major role in developing the creative direction and strategy for the company moving forward,” according to Specific Media, the company that he will partner with.
The deal is for $35 million, mostly in Specific Media stock, according to a person familiar with the matter. The deal values MySpace at a fraction of what News Corp. paid for the site six years ago and paves the way for the layoff of about half of the 500 workers, the person said. As part of the exchange, News Corp. will receive a private equity stake in Specific Media.
With Timberlake’s help, the buyers hope to revitalize MySpace and transform it into a destination for original shows, as well as bolster its already available video content and music.
“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,” Timberlake said in a statement.
The sale 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% stake in the site, said the person, who was not authorized to speak publicly and spoke on condition of anonymity.
News Corp. bought MySpace for $580 million in 2005, but users, advertisers and musicians who once relied on it for promotion fled the site for other hotter social networks like Facebook and Twitter. Less than half of MySpace’s 74 million monthly visitors are now in the United States, where its visitor count dropped by half in May to 35 million, according to tracking firm comScore Inc.
MySpace CEO Mike Jones, the last member of a three-member executive team appointed to fix the site in April 2009, said in a memo to staff Wednesday that he would help with the transition for two months before departing.
