Marking the end of a social era, ad network Specific Media on Wednesday announced the acquisition of Myspace. And in a strange twist, music star-cum-actor Justin Timberlake is also taking an undisclosed ownership stake in the company, and is expected to play a key role in re-imagining the MySpace brand.
While financial terms of the deal were not disclosed, multiple reports put it at about $35 million -- far less than the $580 million News Corp. paid for the then-high-flying site back in 2005.
Per the sale, News Corp. is taking a minority equity stake in Specific Media.
What does Specific Media want with the fallen social network? "Myspace is a recognized leader," said Tim Vanderhook, Specific Media CEO -- but a leader in what he did not clarify.
What's more, "there are many synergies between our companies, as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest," Vanderhook added.
"There's a need for a place where fans can go to interact with their favorite entertainers, listen to music, watch videos, share and discover cool stuff and just connect," Timberlake stated. "Myspace has the potential to be that place."
Founded in 1999 by brothers Tim, Chris and Russell Vanderhook, Specific Media bills itself as a "global interactive media company."
In what now can now be seen as a sign of things to come, the company recently appointed Jim Knopf to a newly created position of entertainment industry lead.
With Myspace, Specific is also getting Myspace Music, which offers a catalogue of freely streamable audio and video content to users.
According to Compete.com, Myspace drew 30.79 million unique visitors last month, which represented a 54.47% drop year-over-year.
Myspace CEO Mike Jones on Wednesday said he would step down from his post immediately, but would likely work with News Corp. and its new parent company in an advisory role for a short time.
In a memo to staff, Jones also announced pending layoffs as part of the sale. "In conjunction with the deal, we are conducting a series of restructuring initiatives, including a significant reduction in our workforce."
Already a shadow of its former self, Myspace was reportedly planning to lay off nearly 40% of its remaining staff -- or about 150 employees -- this week. First reported by Gawker, the news was later confirmed by TechCrunch.
Apparent for some time, News Corp.'s desire to unload Myspace recently became palpable. "With a new structure in place, now is the right time to consider strategic options for this business," News Corp. COO Chase Carey told analysts in early February.
Carey's comments came on News Corp.'s latest earnings report, which included a $275 million writedown for its digital media business, which was said to have stemmed largely from Myspace.
Late in February, News Corp. brought in Allen & Co. to help unload Myspace, and was reported to have received "early interest" from about 20 parties -- the majority of which were private equity and venture capital firms.
Largely perceived as an effort to gussy up the company, Myspace laid off 47% of its staff -- or 500 people -- in January.
Myspace has not been the only digital asset that News Corp. has sought to unload. In early May, the media conglomerate decided to spin off IGN.com. Unlike Myspace, however, IGN is anything but a sinking ship. Indeed, IGN expects to earn more than $10 million this year on revenues of around $100 million.