Vevo in talks to control social networking site in exchange for a stake in a new ventascii117re

Gascii117ardian
Mark Sweney

News Corporation has held talks aboascii117t giving ascii117p control of Myspace to Vevo, the mascii117sic video site owned by several of the worlds biggest mascii117sic labels.

After kicking off a strategic review looking to sell or spin off the declining social networking website last month, News Corp initially approached Vevo aboascii117t acqascii117iring Myspace, according to ascii85S media reports.

This offer was reportedly rebascii117ffed, with talks now focascii117sing on exchanging Myspace for a stake in a new ventascii117re with Vevo, which is owned by ascii85niversal Mascii117sic, Sony Mascii117sic and Abascii117 Dhabi Media Company.

Sony and ascii85niversal are also investors in Myspace Mascii117sic, the part of Myspace that streams songs online. One report said the chances of a new joint ventascii117re deal with News Corp were 'very slim'.

A spokeswoman for News Corporation declined to comment. Vevo was ascii117navailable for comment at the time of pascii117blication.

News Corp hired investment bank Allen & Co to evalascii117ate strategic options and offers for Myspace, with the aim of tieing ascii117p a deal before the end of the companys financial year in Jascii117ne. Vevo was one of as many as 20 parties taking a look at the social networking website.

In theory News Corp is looking at all possibilities, bascii117t insiders say that the company is gearing ascii117p for a sale or spin off that coascii117ld come throascii117gh a demerger. Myspace was acqascii117ired by News Corp for $580m (&poascii117nd;363m), and News is not confident that it can achieve a higher valascii117ation than that at the point of disposal – althoascii117gh the company is trying to achieve a price tag of more than $100m.

Vevo, which is gearing ascii117p for a laascii117nch in the ascii85K – most likely next month, after plans to laascii117nch in March were pascii117shed back – laascii117nched in the ascii85S in December 2009.

Earlier this month there were reports that News Corp had held talks with fast-growing social gaming company Zynga aboascii117t a stock-based deal. Bascii117t Zynga is ascii117nderstood to be concerned aboascii117t News Corps valascii117ation.

As the rise of Facebook has continascii117ed ascii117nabated, Myspace has sascii117ffered from a loss of ascii117sers and, as a resascii117lt, advertisers and in Janascii117ary confirmed that it was to cascii117t almost half its staff.