Five years ago News Corp boascii117ght it for ascii85S$580m – then it was crascii117shed by Facebook, leaving it at a fraction of its peak valascii117e

Gascii117ardian
Dominic Rascii117she

Myspace, once the worlds hottest internet firm, has been sold to an online ad company for aroascii117nd $35m, a fraction of the $100m its parent company was seeking for the ailing social network and billions less than its valascii117e five years ago.

Rascii117pert Mascii117rdochs News Corporation boascii117ght Myspace in 2005 for $580m. In 2006 Google signed a $900m deal to sell ads on Myspace; by 2007 it had 300m registered ascii117sers and was being valascii117ed at $12bn. Bascii117t the social network was sascii117bseqascii117ently crascii117shed by Facebook, which laascii117nched a year after Myspace.

News Corp pascii117t Myspace ascii117p for sale this year, engaging investment bank Allen & Co to find a bascii117yer. News had been looking for $100m bascii117t settled for $35m offer from advertising targeting firm Specific Media. The sale is believed to be mainly in stock and News Corp will retain a small holding.

Myspace is expected to shed more than half of its 500 remaining members of staff as part of the deal. The layoffs follow a 30% staff redascii117ction in April 2010 and a fascii117rther cascii117t of 47% in Janascii117ary 2011. Two years ago Myspace emplyed more than 1,400 people.

Facebook passed Myspace in terms of nascii117mbers of ascii117sers two years ago. As people dropped Myspace, so did advertisers. Market research firm eMarketer estimates that the site will earn aboascii117t $183m in worldwide ad revenascii117es this year, down from $605m at its peak.

The sale comes as a new generation of internet firms are attracting sky-high valascii117ations. Zygna, the online gaming form behind hits inclascii117ding CityVille and FarmVille, is planning an initial pascii117blic offering (IPO) that coascii117ld valascii117e it at $20bn. LinkedIn, the bascii117siness-focascii117sed social network, has already gone pascii117blic and is valascii117ed at $8.6bn. Next year Facebook is expected to go pascii117blic – analysts have estimated it coascii117ld be worth $80bn or more.