Moblie Social Network MocoSpace is in talks with News Corp on buying MySpace. Justin Siegel, CEO of MocoSpace, told Bloomberg that his company contacted News Corp after the company said it was considering strategic options for MySpace. News Corp has agreed to talks with the company. The rationale for a potential acquisition is MySpace’s significant mobile unit.
An acquisition of MySpace by MocoSpace would have interesting implications for the multicultural market: More than a third of MocoSpace’s members are Hispanics. In addition, MySpace has a great brand name recognition among U.S. Hispanics. Hispanics over index versus the general population in mobile phone usage and its applications.
MySpace is "probably overstaffed," said Siegel, who envisions selling the MySpace music business or shutting it down. "The crown jewel is the mobile part of that business," Siegel said. MocoSpace, founded in 2005, has received venture capital from SoftBank Capital and General Catalyst, and both are potential sources of capital to fund a purchase, Siegel said. He estimates that MySpace could sell for USD 50-200 million, versus the USD 580 million News Corp paid for the social network in 2005.
News Corp has hired investment bank Allen & Co. to advice it on the sale of MySpace.
According to Reuters more than 50 interested parties have contacted News Corp. about MySpace.