For a guy who walked away from MySpace with $47 million, Brad Greenspan shouldn't have anything to be angry about.
But the founder of the Los Angeles company that created the popular social networking site Thursday railed against his former firm and demanded a federal investigation of News Corp.'s 2005 acquisition of MySpace, calling it "one of the largest merger and acquisition scandals in U.S. history."
Greenspan, who was ousted from Intermix Media in 2003, alleged that News Corp. "bilked" shareholders out of tens of billions of dollars and said the Securities and Exchange Commission, the Justice Department and Senate should investigate the $580-million deal.
The 33-year-old entrepreneur leveled allegations of insider trading and options manipulation on the website FreeMySpace.com, where he quotes e-mail exchanges that purport to show how Intermix engineered a quick sale to News Corp.
"It wasn't about what's the best deal," Greenspan said. "It was about getting the deal done at any cost and jamming it home. That's just not a fair way to play."
Greenspan's complaints amplify the claims he made in a February lawsuit filed against Intermix and VantagePoint Venture Partners in Los Angeles County Superior Court. The complaint claims that News Corp. acquired Intermix as the result of an unfair process and at an unfair price that did not reflect its growth and prospects.
MySpace is by far the most used social networking site, populated by more than 50 million people who created Web pages about themselves. But Rupert Murdoch's News Corp. raised eyebrows with what many critics said was an overly generous offer.
The deal came loaded with baggage -- including concerns about sexual predators stalking children on the social networking site and Intermix's history of installing spyware on home computers.
"It's unfortunate that Mr. Greenspan continues to issue press releases complaining about a deal that many industry experts initially believed was a risk for News Corp. to take," said Julie Henderson, a spokeswoman for Fox Interactive Media. "We've strategically built this business since the acquisition and are just now beginning to realize real financial value. This is simply a case of sour grapes making for loud complaints."
News Corp. has worked for a year to profit on MySpace's traffic without alienating its youthful audience. A deal worth at least $900 million makes Google Inc. the exclusive provider of search and keyword advertising for Fox Interactive sites, including MySpace.
