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Tuesday, October 10, 2006
Suit over sale of MySpace dismissed
News Corp., the buyer, says it feels 'vindicated'
News Corp., Rupert Murdoch's media company, said a judge dismissed a lawsuit challenging its purchase of MySpace.com, rejecting claims by Brad Greenspan, former chief executive officer of the Web site's parent, that the deal cheated shareholders.
Los Angeles Superior Court Judge Carolyn Kuhl ruled Friday that the acquisition of Intermix Media Inc., MySpace's parent company, last year was lawful and shareholders were fully informed when they voted on the transaction, New York-based News Corp. said Monday.
The decision lifts a cloud over the popular networking site, which Greenspan says he started in August 2003.
He sued MySpace in February, saying the $580 million paid by News Corp.'s Fox unit didn't reflect the growth prospects.
Thursday, he demanded a federal investigation into the sale, claiming the deal defrauded shareholders of more than $20 billion.
News Corp. and Fox Interactive "feel vindicated" by the ruling, Mike Angus, general counsel of News Corp.'s Fox Interactive Media, said.
Greenspan last week posted his claims in a report at Freemyspace.com, a Web site where he argued the purchase should be nullified.
He said he was seeking an investigation by the Securities and Exchange Commission, the Justice Department and the Senate.
MySpace would be worth billions of dollars had it stayed on its own and sold shares to the public, Greenspan said, an assertion challenged by analysts.
News Corp. snatched MySpace during a weekend in July 2005 after Viacom Inc. offered $500 million for the business. MySpace has more than doubled its registered users this year, to more than 110 million.
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