News Corp. mulls sale, spinoff of MySpace

News Corp. revealed today that it's exploring the possibility of selling or spinning off MySpace, just a day after the troubled social-networking site announced heavy layoffs.

During an announcement that confirmed many rumors, MySpace CEO Mike Jones briefed employees today on company options during a companywide meeting, spokeswoman Rosabel Tao told Bloomberg.

"News Corp. is assessing a number of possibilities including a sale, a merger, and a spinout [spinoff]," Tao said. "The process has just started."

On Tuesday, Jones announced a "significant organizational restructuring that will result in a 47 percent staff reduction across all divisions globally and impact about 500 employees."

News Corp. bought MySpace in 2005 for $580 million as part of its purchase of Intermix. But the former social-networking sensation has fallen on hard times lately, losing more and more ground to Facebook until it finally underwent a massive redesign that left it focusing on pop culture media-sharing for young users rather than attempting to be a universally appealing social network.

However, in the face of News Corp.'s public frustration with MySpace, those efforts were not expected to result in a major turnaround capable of saving the site. News Corp. revealed in November that quarterly revenue at MySpace was down $70 million compared with the same period the year before. During the earnings call at the time, Chief Operating Officer Chase Carey called out MySpace's poor performance and said "current losses are not acceptable or sustainable."