Closing another chapter on one of the Internet’s most iconic properties, Myspace has been sold to to Specific Media, an advertising network, for $35 million.
Sources close to the situation said the deal is being completed today, although it has not been officially signed. Myspace’s owner, News Corp., will hold on to a very small stake of less than five percent.
[UPDATE: It’s official; see the press release and memo to Myspace employees from outgoing CEO Mike Jones below.]
AllThingsD broke news of Specific’s interest in Myspace yesterday.
The price is well below the $100 million that News Corp. had been hoping for, and a chasm away from Myspace’s one-time billion valuation.
The deal includes a halving of Myspace’s staff of 400, as well as other cost cuts. It’s likely Jones and other top staff will remain only for an interim period.
News Corp. bought Myspace for $580 million in 2005, and made that back via a lucrative advertising deal with Google when the social networking site was flying high.
But that was another time — the media giant has been trying to sell the site before the end of its fiscal year, which falls on Thursday, in order to get it off the books.
There were several other bidders in the process, including separate efforts by the two co-founders of Myspace, Chris DeWolfe and Tom Anderson.
More recently, the preferred acquirer was a group that included Activision CEO Bobby Kotick, but it fell apart over a number of issues.
This week, it came down to Specific and also a private equity firm, Golden Gate Capital.
According to a report yesterday in The Wall Street Journal:
Founded in 1999 by Tim Vanderhook and his brothers Chris and Russell, Specific Media helps marketers buy digital ads across the Web, online video, mobile and even the TV. The Irvine, Calif., company got its start brokering ad space for websites and quickly moved into the fast-growing business of collecting and using Web browsing, demographic, geographic and other profile information about consumers to target ads. The company now ranks among the largest online advertising networks in the country, reaching 170.9 million unique U.S. visitors in May, or about 79% of the U.S. Internet users, according to comScore Inc.
A Myspace deal would give the company access to data about Myspace users to be used for ad targeting. It also would transform the firm into a media company with its own ad space to sell instead of simply an online ad technology firm that brokers ad space on behalf of other websites.
Specific Media’s executive team includes knowledge of the inner-workings at Myspace, with two executives who previously worked at Fox Audience Network, News Corp.’s online advertising unit that sold ads for Myspace.
Specific Media has raised more than $110 million in funding, closing a $100 million round of financing from private-equity firm Francisco Partners in 2007. Since then, the company has acquired a couple of digital advertising companies, including online video company Broadband Enterprises and an Amsterdam ad technology company.
Here is the official press release and the memo to Myspace staff from Jones:
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.
(Full disclosure: News Corp. owns Dow Jones, which owns this site.)