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MySpace & News Corp.
Founded in 2003, Myspace was once the most popular social networking web site in the world, and in June of 2006, the company surpassed even Google as the most visited website in the United States. In August of 2006, the site had reached over 100 million account activations.
In 2005, the company was purchased my Rupert Murdoch's News Corporation for $580M. When the company was at its peak in 2007, Myspace had a market capitalization of about $12B.
In 2008, the company's fortunes began to go into a steep decline. Rather than improving their social networking experience the company chose to go with a "portal-style" strategy for building its audience around music and entertainment instead. Additional modifications to the site in the hopes of increasing the company's advertisement revenue also made it unwieldy and slow to use.
To make matters worse, the company's main rival, Facebook, was eclipsing it in traffic with its clean and efficient site design, increased number of users and was building a platform where 3rd-party developers could plug into an API to build new applications for it. By contrast, Myspace was doing all of its development in-house.
In June 29, 2011, Myspace was sold to Specific Media and pop star Justin Timberlake for approximately $35 million, a far cry from the $12B valuation it had only four years previous.