Exclusive: MySpace and Rubicon Project in FAN Swap Deal
MySpace is trading most of the assets of its Fox Audience Network to the Rubicon Project in exchange for a significant equity minority stake, according to sources close to the situation.
Under the deal, which is nearly complete with a signed term sheet, MySpace will hand over a number of parts of FAN, including most of its 300 employees.
FAN–after a number of attempts to spin off from News Corp. (NWS), which owns the advertising network and MySpace–was recently spun into the social networking site after the departure of its top exec, Adam Bain, to Twitter.
But News Corp. and MySpace management decided it made less sense to keep most of FAN within MySpace, which is in the midst of a massive overhaul of the troubled service that will debut in a few weeks. MySpace will keep parts of FAN related to user data, said sources.
Both companies are based in the Los Angeles area. Rubicon is one of three big “yield optimizers,” which aim to help publishers manage their relationship with advertising networks so they get the highest possible dollar for the ad space. It competes with PubMatic and AdMeld.
A variety of rumors have swirled around FAN and a number of ad companies over the last several months. One recently in AdExchanger.com had Rubicon being folded into MySpace.
Not so. Instead, this deal is similar to one that News Corp. did in January of this year with Flixster, spinning its Rotten Tomatoes movie-review unit into the San Francisco social movie site for a large minority stake in the combined entity.
Several companies were looking at the pieces of FAN, sources said, but Rubicon was the cleanest option.
It’s a save all around. Sources said Rubicon had hired boutique investment bank Allen & Co. to look at a variety of alternatives for it and also had been reshuffling its staff.
BoomTown has calls in to both companies and am awaiting official comment.
(Full disclosure: News Corp. owns Dow Jones, which owns this site.)