The Times reported today that News Corporation has discussed swapping MySpace.com with Yahoo! in return for a 25% stake in the enlarged group. According to the article, the discussions "remain tentative" and could collapse after the departure of Terry Semel as Yahoo!'s chief executive and his replacement by Jerry Yang.
News Corp's thinking is that even if it means losing some control of MySpace it would give Rupert Murdoch's media group exposure to a far larger internet-based business.
News Corp paid $580 (£290m) for MySpace in the summer of 2005, but the social networking site has begun to lose ground to Facebook, as Murdoch has conceded. According to Hitwise's latest figures, Facebook took a 13.71% UK market share in May, up from 12.82% in April.
But it is Semel's departure that may dash News Corp's ambition to get a slice of the $37bn (£18.5bn) Yahoo!. Doubtless the incoming Yang will be wondering whether MySpace has a lucrative enough future to warrant the News Corp swap.
