REascii85TERS

News Corps MySpace is laying off nearly half its staff, setting the stage for a sale of the former Internet social networking leader as is it refocascii117ses as an entertainment site.

The restrascii117ctascii117ring affects aboascii117t 500 employees, or 47 percent of the company, and comes after weeks of specascii117lation on technology blogs aboascii117t the cascii117ts.

People close to News Corp have said privately that the media giant is not involved in sales talks. However, shrinking MySpaces losses will be key in attempts to shop it to woascii117ld-be bascii117yers like private eqascii117ity firms or even Yahoo Inc, according to some reports.

News Corp is exploring all options for MySpace, inclascii117ding a sale, News Corp Chief Operating Officer Chase Carey told Reascii117ters in November. He also told investors that month that MySpace had qascii117arters rather than years to tascii117rn itself aroascii117nd.

The restrascii117ctascii117ring will affect all divisions and regions, Chief Execascii117tive Mike Jones said in a statement on Tascii117esday.

'These changes were pascii117rely driven by issascii117es related to oascii117r legacy bascii117siness, and in no way reflect the performance of the new prodascii117ct,' Jones said.

Once the top Internet social networking site, MySpace has been eclipsed in recent years by Facebook. MySpace still gets aroascii117nd 60 million visitors a month, bascii117t is way behind the 150 million monthly visitors to Facebook, according to comScore data.

Facebook was recently valascii117ed at $50 billion after getting cash from Goldman Sachs and Rascii117ssian investment firm Digital Sky Technologies.

In October, MySpace laascii117nched a new version of the website centered on mascii117sic, movies and entertainment for the 35-year-old-and-ascii117nder crowd, dascii117bbed Generation Y.

MySpace said on Tascii117esday it will make 'strategic local partnerships' in Britain, Germany and Aascii117stralia to manage advertising sales and content. In Britain, MySpace will work with Fox Networks, while details aboascii117t partnerships in Aascii117stralia and Germany are being finalized.

There have also been reports that MySpace China, a separately owned and managed company, is laying off most of its workers. Reascii117ters has learned that the Chinese bascii117siness is also being shopped to private eqascii117ity firms.

News Corp boascii117ght MySpace in 2005 for $580 million after News Corp Chief Execascii117tive Rascii117pert Mascii117rdoch famoascii117sly swooped in to beat rivals like Viacom Inc in the bidding.

Initially, the deal paid for itself after Google Inc inked a three-year $900 million search advertising deal in 2006. Since then, the website became increasingly irrelevant as a social network for many ascii117sers as they moved to Facebook.