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MySpace Purchase Ruled Lawful, News Corp. Says

October 10, 2006|From Reuters

NEW YORK — News Corp. said Monday that a Los Angeles judge had rejected legal challenges to the media company's 2005 acquisition of MySpace's parent, Intermix Media Inc., and ruled that the deal was lawful.

News Corp. said Los Angeles Superior Court Judge Carolyn Kuhl on Friday "fully dismissed" the challenges spearheaded by Brad Greenspan, former chief executive of EUniverse Inc., which was renamed Intermix, and other former shareholders.

Greenspan said last week he was seeking a federal investigation of the sale, claiming the $580-million deal defrauded shareholders by undervaluing the Internet's most popular social networking site.

He left Intermix in 2003 amid an informal Securities and Exchange Commission inquiry and accounting restatements.

Greenspan had bid against News Corp. last year to buy the portion of Intermix he did not own but lost after Intermix's board rejected his proposal.

He has also accused former Intermix Chief Executive Richard Rosenblatt of hiding information on MySpace's revenue growth from shareholders to present a distorted financial picture and execute a deal quickly.

Greenspan contends that MySpace could now be worth more than $20 billion. He retained an 11% stake in the firm.

News Corp. and Fox Interactive "feel vindicated" by the ruling, said Mike Angus, general counsel of News Corp.'s Fox Interactive Media.

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