Orange County advertising network Specific Media and Bay Area private equity firm Golden Gate Capital are finalists in the bidding for struggling social network Myspace, people familiar with the matter confirmed.
News Corp. had hoped the once-dominant Myspace would fetch as much as $100 million, but bidding is in the range of $20 million to $30 million in cash and stock, said the people, who declined to be identified because talks are confidential. The media giant, which is controlled by Rupert Murdoch and paid $580 million for Myspace in July 2005, would retain a minority stake in the site, a person familiar with the matter has said.
The pending acquisition, which could close as early as this week, is expected to result in another round of layoffs at Myspace — as many as half the Beverly Hills company’s remaining 500 employees. Myspace laid off 500 people in January.
Names of other potential bidders have recently surfaced, including Myspace co-founder Chris DeWolfe, and an investor group that was courting a personal investment from Activision Blizzard Inc. Chief Executive Bobby Kotick. But they have fallen to the background in discussions for now, as new front-runners emerged, said people with knowledge of the matter.
Specific Media of Irvine was founded in 1999 by Tim Vanderhook and his brothers, Chris and Russell. The company helps brands buy ads online, on mobile devices and on Internet-connected TVs. The online ad network has flown under the radar but counts among its senior executives a Myspace veteran, Jason Knapp. He previously worked for the Fox Audience Network, the online advertising unit of News Corp.
A spokeswoman for Specific Media declined to comment.
The private equity firm Golden Gate Capital, which is based in San Francisco, has about $9 billion under management and has been an active investor in the consumer sector. Over the last five years, it has invested in or acquired more than 20 brands, including Herbalife, Eddie Bauer and Romano’s Macaroni Grill.
A Golden Gate Capital spokesman also offered no comment.
It is unclear what Specific Media or Golden Gate Capital would do to turn around the struggling Myspace, which has hemorrhaged millions of users and, not coincidentally, advertising revenue.
After peaking at 76.3 million users in October 2008, Myspace’s monthly visitors fell to 35 million in May, according to ComScore Digital Analytix. Researcher EMarketer projects the site’s ad revenue at $184 million this year, down from $470 million in 2009.
On Tuesday, the website AllThingsDigital first reported the finalist bidders and the scope of the next wave of layoffs.