MySpace awaits bids as YouTube acquires Delicious

Media giant News Corp is accepting offers for social networking site MySpace, with a number of private equity firms and companies expected to submit bids by the end of the week.

According to a report by the Wall Street Journal, News Corp will accept bids around $US100 million, despite paying a reported $US580 million for the site in 2005.

The report claims a number of private equity firms, including Thomas H Lee Partners, Redscout Ventures and Criterion Capital Partners LLC, will consider bidding for the embattled site.

MySpace has struggled to maintain a substantial slice of the social media pie since the onset of Facebook, which has enjoyed immense popularity since 2007.

Despite repeated attempts to reinvent itself, MySpace user numbers have continued to dwindle, with the company forced to dismiss almost half its workforce earlier this year.

Meanwhile, Yahoo has sold social bookmarking service Delicious to YouTube founders Chad Hurley and Steven Chen, who plan to fold it into their new company AVOS.

Last month, it was rumored Yahoo had sold Delicious for $5 million, a fraction of the price it reportedly paid for the start-up in 2005, although terms of the AVOS deal have not been disclosed.

The deal follows months of speculation about the fate of Delicious, which Yahoo has been looking to sell since December last year.

Delicious said in a statement user data will be preserved and the new team will add new features and “grow the service overall”.

Yahoo asks that users sign in to Delicious “and agree to let Yahoo transfer your bookmarks to the new owner”, before the move is completed in July.

Rival social bookmarking service Trunk.ly, a Melbourne-based start-up recently profiled by StartupSmart, says Trunk.ly’s launch in December was timed to coincide with the rumoured demise of Delicious.

“All of a sudden, Yahoo made this announcement [about the demise of Delicious] and we just went, there are all these people out there who are Delicious users, panicking and looking for Delicious alternatives [so] we just have to throw the doors open,” Trunk.ly co-founder Tim Bull told StartupSmart.

Bull says the acquisition confirms social bookmarking represents a huge market, describing the deal as a “smart move” on Hurley and Chen’s part.

He says the challenge for Trunk.ly will be to execute its offerings faster than Delicious, particularly as many consumers are still struggling to see the value in social bookmarking.

Breaking away from Yahoo should come as good news to Delicious users who have remained loyal to the service throughout the recent turmoil.

Among the priorities detailed by Delicious is a bookmark extension that works with Firefox 4.0.

A number of start-ups have also made it easy for Delicious users to migrate over, with storage app Springpad reporting two million Delicious bookmarks were moved to its servers within 10 days of the initial “sunset” drama.

Google also launched a tool to make it easy for Delicious users to move their bookmarks to its Google Bookmarks service.