Founder of MySpace.com Operator Sues Over Sale

Intermix Media Inc. founder Brad Greenspan sued the website operator, claiming that its $580-million sale to Rupert Murdoch’s News Corp. didn’t reflect the growth prospects of its main asset, MySpace.com.

The lawsuit, filed Tuesday in Los Angeles County Superior Court, accuses Intermix directors of breaching their fiduciary duties by failing to seek a higher price and acting “despite numerous conflicts of interest.”

“It’s something that everyone would’ve seen is worth in the several-billion-dollar range, MySpace by itself,” Greenspan said. MySpace.com is the fourth-most-visited site on the Web, according to Greenspan’s suit.

News Corp. agreed to pay $12 a share in cash for Intermix on July 18 and completed the takeover in October. Greenspan, who owned about 10% of Los Angeles-based Intermix, offered $13.50 a share in September in an attempt to block the purchase.

Intermix sales surged 49% to $79 million in its fiscal year ended in March, fueled by MySpace.com. That site allows people with common interests to communicate via e-mail, weblogs and chat rooms.

Greenspan’s suit targets Intermix executives and directors, along with VantagePoint Venture Partners, a venture capital firm that Greenspan said squeezed him out of Intermix in 2003. Murdoch and News Corp. aren’t defendants.

The directors chose a quick sale to News Corp., rather than consider bidders such as Viacom Inc., so long as News Corp. agreed to protect them from any legal liability, Greenspan said.

News Corp. spokesman Andrew Butcher said, “This is just an amended version of a frivolous lawsuit.”

VantagePoint couldn’t be reached for comment.

Greenspan first sued to challenge the sale in August. Tuesday’s suit amended that case, adding information gleaned since the sale was completed.

Times wire services were used in compiling this report.