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MySpace Sale May Fetch $200 Million, Suitor Says

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News Corp.'s Chase Carey
Charles "Chase" Carey, deputy chairman, president and chief operating officer of News Corp. Photographer: Ramin Talaie/Bloomberg

Feb. 4 (Bloomberg) -- News Corp., which paid $580 million for MySpace in 2005, may end up selling the social network for $50 million to $200 million, said the chief executive officer of a potential acquirer.

MocoSpace, a Boston-based social network for mobile devices, contacted News Corp. after the New York-based company said Feb. 2 that it is considering strategic options for MySpace, said Justin Siegel, CEO of MocoSpace. News Corp. has agreed to talks about a possible sale, he said.

“They are open to discussing it with us,” Siegel said in an interview. “This may be an opportunity to acquire an asset that we have the unique skills to manage.”

Chase Carey, News Corp.’s chief operating officer, told investors two days ago the company is considering “new owners” for Beverly Hills, California-based MySpace, which News Corp. bought in 2005. Many potential buyers have inquired about MySpace, Carey said at the time, without naming any.

News Corp. spokesman Jack Horner declined to comment.

Prior to Carey’s comments this week, MocoSpace met with bankers and held talks with News Corp. about working with MySpace, Siegel said. Since then, Siegel said, he has held discussions with an executive vice president who reports to Jonathan Miller, the head of News Corp.’s digital media group.

MySpace is “probably overstaffed,” said Siegel, who envisions selling the MySpace music business or shutting it down.

“The crown jewel is the mobile part of that business,” Siegel said.

Trailing Facebook

Last month, MySpace said it would cut about 500 jobs, or 47 percent of its staff, as part of a broad restructuring. In a previous round of cuts in June 2009, MySpace reduced staffing by about 30 percent after advertising sales fell and social-networking rival Facebook Inc. surpassed the site in U.S. users.

MocoSpace, founded in 2005, has received venture capital from SoftBank Capital and General Catalyst, and both are potential sources of capital to fund a purchase, Siegel said.

News Corp., controlled by Chairman and CEO Rupert Murdoch, fell 8 cents to $16.88 at 4 p.m. New York time in Nasdaq Stock Market trading.

To contact the reporter on this story: Brett Pulley in New York at bpulley@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom in New York at pelstrom@bloomberg.net

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