Rupert Murdoch's six-year stewardship of the social-networking pioneer MySpace reached its ignominious end last night as the media mogul sold the company for less than one-tenth of the price he paid for it.
As part of Mr Murdoch's News Corp empire, MySpace lost its crown as the world's most popular social network and failed to re-invent itself as a hub for music and television content on the web, as he had hoped.
Instead, the website will be transferred to a surprising new owner, a US advertising company that specialises in tracking internet users around the web and targeting ads at them. The company, Specific Media, said MySpace will be an important addition to its services for advertisers, but declined to elaborate on its plans.
Specific Media is paying $35m (£22m) for MySpace, compared with the $580m News Corp paid for the site in 2005. Mr Murdoch was already resigned to making a loss, but yesterday's sale price was far below the $100m he expected to get when he put the business up for sale earlier this year.
Other terms were also disappointing: instead of getting all its money in cash, News Corp will receive shares in Specific Media and it will also have to hang on to a minority stake in MySpace.
The collapse in the site's value has tracked a collapse in the number of people using the site, and the amount of time that they spend there – and a consequent collapse in demand to place ads on the site, which is where Mr Murdoch hoped to make money. In the US alone, MySpace has lost more than half of its regular visitors since its peak in December 2008, and had just 34.8 million users last month; Facebook had 157.2 million.
"MySpace is a recognised leader that has pioneered the social-media space," Specific Media's founder and chief executive Tim Vanderhook said. "The company has transformed the ways in which audiences discover, consume and engage with content online. There are many synergies between our companies as we are both focused on enhancing digital-media experiences by fuelling connections with relevance and interest."
Despite the takeover, the company told its remaining 500 staff that more than half of them would be laid off, and the firings began yesterday. The company had 1,400 employees two years ago, but has been slimming down since News Corp decided it would no longer tolerate the site's spiralling losses.
Losses at the division that includes MySpace widened to $312m in the first six months of its financial year, which ended last December, and it is expected to have lost the same again in the first six months of this year.
News Corp originally set a deadline of this month for MySpace to become profitable, but instead turned it into a deadline for a sale of the website.
Specific Media was founded in 1999 by Mr Vanderhook and his two brothers, Chris and Russell, and has become one of the largest online-advertising networks in the US, able to create and place targeted ads across the web.
If there is one consolation for Mr Murdoch, it is that he bought MySpace before it peaked, and therefore paid less than he might have. AOL acquired Bebo for $850m in 2008 and sold it last year for less than $10m.