News Corp in talks with Vevo over MySpace fate

Media tycoon Rupert Murdoch's News Corporation is in talks with online music site Vevo.com for a sale or spin-off of its loss-making 'social entertainment' site MySpace, which has seen worldwide traffic shrink by nearly 30 per cent in the last six months.

Murdoch paid a whopping $580 million in 2005 for MySpace, which was then one of the hottest properties on the internet; in 2006; it used to account for 80 per cent of the total social networking traffic, while then newcomer Facebook was a distant second with a 7.6-per cent share.

Things changed dramatically over the last five years in the world of social networking, with Facebook today accounting for more than 500 million members, followed by Twitter at 200 million accounts.

MySpace appears to have lost its way after News Corp redesigned the web site and re-branded it as a 'social entertainment site.' It has just around 60 million members today, down from 90 million in October 2010 when the changes were introduced. Earlier this year, MySpace slashed its workforce by half.

Jonathan Miller, head of News Corporation's digital media group, admitted in Abu Dhabi recently that the group was ''trying to strategically figure out what to do with MySpace.''

Analysts estimate that MySpace will fetch less than $200 million for News Corp, perhaps as low as $50 million.