MySpace acquired, CEO quits
Myspace CEO Announces New Deal and Upcoming Downsizing in Memo
Buy high, sell low, what a business. In 2005, News Corporation spent $580 million to buy MySpace. Today it sold for a fraction of that price, at a paltry $35 million to advertising firm Specific Media.
Current CEO Mike Jones will be leaving the company, and
it looks like the job cuts will run even deeper than the expected 150 employees (37.5% of the total workforce). Some reports are already indicating that this number could go up to as much as 50% of the workforce; and that the service may in future concentrate on music.
Once a leader in social media, MySpace was put up for sale by News Corp. in February, for a $100 million expected value. However, because of constantly plummeting value and influence, it has lost significant revenue. At the peak, MySpace had a valuation of a billion dollars. Apparently, it seems that present owner News Corp will keep a 5-10% share of the company, though the deal is not yet closed.
And reportedly, one of the new owners is Justin Timberlake, so the music connection starts making more sense. Lets see where this goes.
Memo and Press Release:
From: Mike Jones
Sent: Wednesday, June 29, 2011 11:26 AM
To: Myspace All
Subject: IMPORTANT COMPANY NEWS
Today, we are announcing that Myspace will be acquired by Specific Media, one of the world’s leading online media and advertising platforms. Over the next few days you will be hearing from the team at Specific, including their CEO, Tim Vanderhook, regarding their exciting plans for Myspace and how it fits in with the overall vision of their company.
In conjunction with the deal, we are conducting a series of restructuring initiatives, including a significant reduction in our workforce. I will assist Specific with the transition over the next two months before departing my role as Myspace CEO.
I wanted to take a minute to thank you all for the incredible experience it has been to lead this company and to work closely with all of you over the past several years. While I regret we won’t be working together at Myspace any longer, I am very proud of the work we have done here and believe we have performed with excellence – even under extremely difficult circumstances.
My time here at Myspace represents the most engaging and challenging time of my professional career. I have found our team to be comprised of the best people I have come across in our industry.
You can read the press release below. Once again, thank you for all of your hard work and dedication.
SPECIFIC MEDIA ACQUIRES MYSPACE FROM NEWS CORPORATION
Los Angeles, Calif. — June 29, 2011 – Specific Media, a digital media company, today announced it has acquired Myspace from News Corporation. As part of the agreement, News Corporation will take a minority equity stake in Specific Media. Additional terms of the agreement are confidential and will not be disclosed.
“Myspace is a recognized leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online,” said Tim Vanderhook, Specific Media CEO. “There are many synergies between our companies as we are both focused on enhancing digital media experiences by fueling connections with relevance and interest. We look forward to combining our platforms to drive the next generation of digital innovation.”
Specific Media is an innovative global interactive media company that enables advertisers to connect with consumers in meaningful, impactful and relevant ways. Founded in 1999 by brothers Tim, Chris and Russell Vanderhook, Specific Media is currently headquartered in Irvine, CA and operates offices around the world.