According to Bloomberg, News Corp. (NWSA), a diversified global media company, advanced to Vevo.com, the online music website, for exploring the future prospects of MySpace, its social networking site.
The buzz is that News Corp. might swap MySpace for a stake in a new venture of Vevo.com. However, no consensus has been reached on the deal, as Vevo.com is one of the numerous possible buyers of MySpace.
News Corp. has acquired the Beverly Hills, California-based MySpace in 2005 for a price of $580.0 million. The company has employed Allen & Co., a New York-based investment bank, to advice about the strategic alternatives for its social-networking website. The company seeks to reach a strategic decision regarding MySpace before June.
The process was triggered after the site tumbled miserably despite its early success and lagged behind its competitor Facebook Inc. with respect to clients. Moreover, the social networking site lowered its headcount by 47.0% or approximately 500 staff, in its endeavor to revive or restructure its sagging business.
Earlier, the speculation was that MocoSpace might acquire MySpace at a price between $50.0 million to $200.0 million as the media giant has been looking for strategic options for MySpace either to spin off or for possible sale.
New York based Vevo.com was launched on December 8, 2009 as a joint venture between Sony Music Entertainment, Universal Music Group and Abu Dhabi Media with EMI licensing its content to the group without an ownership stake.
Founded in 1922 and headquartered in New York, News Corporation is a diversified global media company operating under Cable Network Programming (which includes STAR Group Limited), Filmed Entertainment, Television, Direct Broadcast Satellite Television and Publishing.
News Corporation’s significant international presence has helped it to broaden its client base and product portfolio. News Corporation principally operates in the United Kingdom, Continental Europe, Australia, Asiaand Latin Americaapart from the United States. We believe that its strong international exposure will drive growth in the coming quarters.
News Corporation has also taken a leap toward an online subscription-based model for general news content. News International, a subsidiary of News Corporation, has started charging readers for online content of The Times of London and Sunday Times of London with effect from June 2010.
Currently, we maintain a long-term ‘Neutral’ recommendation on the stock. Moreover, News Corp., which competes with Time Warner Inc. (TWX), holds a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.
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