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News Corp Hires Allen & Co To Seek MySpace Sale -Source.

 

NEW YORK -(Dow Jones)- News Corp. (NWSNWSA) has hired Allen & Co., the media investment banking firm, to explore a sale of social-networking site MySpace, according to a person familiar with the matter.

The media giant, which owns this newswire and The Wall Street Journal, confirmed last week that it's exploring strategic alternatives for MySpace, which it acquired in 2005 for $580 million.

News Corp. hasn't had any substantive meetings yet or discussed price ranges with bankers from Allen & Co., according to the person; and while it has received interest from a variety of potential bidders for the asset, it hasn't begun soliciting offers.

News Corp.'s acquisition of MySpace was a coup in its day, as the company edged out rival bidders like Viacom Inc. (VIA), but the site has been eclipsed by the rapid rise of Facebook Inc., which is now the leading social networking site.

MySpace has recently shifted its focus away from competing with Facebook toward being a site aimed a sharing and promoting entertainment content, like music. The overhaul has yet to yield any concrete improvements in the site's financial performance, but News Corp. Chief Operating Officer Chase Carey said on a conference call with analysts following the company's quarterly earnings release last week that it's being received well in the market.

Carey added, however, that News Corp. is focused on seeking strategic options for the business, and he said that without yet soliciting offers, the company has already received interest from buyers--both financial and strategic, and foreign and domestic.

Carey said "the plan to allow MySpace to reach its full potential may be best developed under a new ownership."

News Corp.'s division that includes MySpace posted a revenue decline for its fiscal second quarter of 29% to $319 million. Its operating loss widened to $156 million from $125 million a year ago.