Pop star Justin Timberlake has been named as one of the cut-price buyers of troubled social network MySpace.
In a bid to raise the profile of the failing site. Hit the jump to read the rest of the story.
Pop star Justin Timberlake has been named as one of the cut-price buyers of troubled social network MySpace.
In a bid to raise the profile of the failing site, Timberlake, who starred in The Social Network, the film that charted the rise of Facebook, is part of a group that announced today it will buy the site from News Corp.
Timberlake will become a part owner and play ‘a major role in developing the creative direction and strategy for the company moving forward,’ according to Specific Media, the company that he will partner with.
With Timberlake’s help, the buyers hope to revitalise MySpace and transform it into a destination for original shows, as well as bolster its already available video content and music.
‘There’s a need for a place where fans can go to interact with their favourite entertainers, listen to music, watch videos, share and discover cool stuff and just connect. MySpace has the potential to be that place,’ Timberlake said in a statement.
The deal is for $35 million, which values MySpace at a fraction of what News Corp. paid for the site six years ago and paves the way for the layoff of about half of the 500 workers, a source said.
As part of the exchange, News Corp. will receive a private equity stake in Specific Media.
The sale is expected to close by Thursday, a day before the end of News Corp.’s fiscal year. News Corp. will maintain less than a five per cent stake in the site, said the source, who spoke on condition of anonymity.
News Corp. bought MySpace for $580 million in 2005, but users, advertisers and musicians who once relied on it for promotion fled the site for other hotter social networks like Facebook and Twitter.
Less than half of MySpace’s 74million monthly visitors are now in the United States, where its visitor count dropped by half in May to 35million, according to tracking firm comScore Inc.
Specific Media confirmed the acquisition but not the terms of the deal on Wednesday.
‘We look forward to partnering with someone as talented as Justin Timberlake, who will lead the business strategy with his creative ideas and vision for transforming MySpace,’ the company’s CEO Tim Vanderhook said.
‘This is the next chapter of digital media, and we are excited to have a hand in writing the script.’
MySpace CEO Mike Jones, the last member of a three-member executive team appointed to fix the site in April 2009, said in a memo to staff on Wednesday that he would help with the transition for two months before departing.
MySpace launched in 2003, founded by entrepreneurs Chris DeWolfe and Tom Anderson, who is every MySpace user’s first friend.
It became a popular Internet destination and a key way for little-known musicians to market themselves and interact with their fans.
But MySpace lost its footing over the years as the fun of customizing one’s profile began to bore its users and heavy use of banner advertisements slowed the speed at which pages load.
Meanwhile, Facebook, founded in 2004, limited what users and advertisers could do, but kept pages clean, and freshened them with its ‘news feed’ of updates, a feature that MySpace later copied.
Facebook now has more than a billion users worldwide.
