The investor group has emerged as a front-runner in negotiations with News Corp. to take control of Myspace, according to a WSJ (which News Corp. owns), as the media company rushes to complete a transaction by 6/30—the end of its fiscal year.
Headquartered in Santa Monica, CA, Activision Blizzard is a worldwide pure-play online and console game publisher with leading market positions across all categories of the interactive entertainment software industry. Activision Blizzard’s portfolio includes video games such as Guitar Hero, Call of Duty, and Tony Hawk, as well as Spider-Man, X-Men, Shrek, James Bond, World of Warcraft and more.
While News Corp. continues to talk to several potential bidders, negotiations are now focused on a group that would take over the social-media site but leave News Corp. with about a 20% stake, the story said. At least two firms that were weighing a bid—private-equity firm Thomas H. Lee Partners in a partnership with Redscout Ventures and Criterion Capital Partners LLC —are no longer considered serious contenders.
Bobby Kotick, CEO of Activision Blizzard Inc., said he had been approached about being part of the investor group but hasn’t yet committed. Any investment by him would be personal and small, and Activision wouldn’t be involved, he said.
As well, WSJ sources said Kotick wouldn’t take an active management role. Another person cautioned that a deal between the investor group and News Corp. was a “long shot.”
Since News Corp. started accepting bids for the struggling social-media site around April, a number of private-equity firms and other Internet start-ups have expressed interest. Increasingly, News Corp. has focused on deals in which it would retain an ownership stake in the business and hand over operational control.
Some other suitors who have remained interested in recent weeks include private-equity firm Criterion Capital Partners LLC and social networks Tagged Inc. and myYearbook. Former Myspace CEO Chris DeWolfe and music-video site Vevo, a JV between major record labels, had also been in the mix, said WSJ. Talks with Vevo have been stalled for several weeks, though a deal between the two was long considered unlikely, in part because the companies were discussing a complicated arrangement that could have entailed Vevo collaborating with Fox’s television arm to create new programming.
Tagged CEO Greg Tseng said in a statement that the company “would be excited to take MySpace back to its original roots as a place to meet people.”
RBR-TVBR observation: It really sounds like there isn’t that much interest from Activision Blizzard to run Myspace, but it might be a part of an investment group. At this point, the best route for Myspace—whether it stays with News Corp., becomes a part of a JV with News Corp. and another group or company or gets bought outright—is to rebrand itself with or as something unique. Perhaps a video chat functionality that works with multiple users / friend groups.