Zynga talked to News Corp about taking MySpace off its hands, but found News Corp’s asking price too steep, a source chatty with News Corp executives tells us.According to this source, News Corp wanted all stock and no cash from Zynga.
A second source close to MySpace confirmed that Zynga and News Corp at least had preliminary talks.
Another source who has seen the MySpace pitchbook says News Corp wants more than $100 million for the downtrodden social network.
That’s a tough sell in a world where MySpace traffic is almost half what it use to be just a year ago and annual revenues are down to ~$80 million from ~$300 million a couple years ago. MySpace also has some legacy contracts related to music and movies that might make the site less attractive.
A Zynga-MySpace tie-up makes sense because right now, Zynga depends entirely on Facebook for its new user growth. But we can’t imagine Zynga would be willing to pay much more than $50 million in cash.
Last week, we reported that current MySpace CEO Mike Jones is also talking to investors about putting a group together.
Jones’s group is considered an early favourite because News Corp brass know him and like what he’s done with the MySpace product. If his group won, News Corp would probably keep a stake.
Other parties looking at MySpace include SocialVibe and MySpace cofounder Chris DeWolfe, who is said to be putting together a group of investors.
Zynga and MySpace declined to comment on this story.
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