News Corp has announced to employees that it intends to spinout or sell its MySpace social network, according to Bloomberg. The announcements come roughly a day after laying off nearly half of its existing staff. News Corp paid $580 million to acquire MySpace in 2005. A spinout would require a venture capital or private equity firm to invest in MySpace, thereby changing its ownership structure. MySpace was the Internet’s top social networking site when News Corp acquired it, but recent years have seen it surpassed by Facebook.
If MySpace was spun out, News Corp would help fund the business and employees would qualify for shares in the independent company. Inquiries regarding possible buyers will be handled by Executive Vice President of Operations Jack Kennedy. News Corp most likely wants rid of MySpace because the social network has persistently lost money since it began to decline. For the fiscal year that ended last year, MySpace lost less than $100 million.