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News may keep stake in unwanted MySpace

June 29, 2011

US reports say News Corp is likely to keep a stake in MySpace as it chooses between the low-ball offers of $20-35 million from funds Specific Media and Golden Gate Capital. News will also pick up the tab for a further staff cull before the sale.

News paid $580 million for MySpace in 2005. A recent investment in Facebook put its value at $70 billion, while Linked-in trades at $8 billion. News Corp recouped its initial investment with a $900 million search advertising deal with Google, but the site has reported heavy losses. The division where it sits reported a $165 million operating loss for last year.

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