Update: A MySpace representative contacted us with a note insisting the MocoSpace acquisition interest is mere press hype on the gaming network’s part, saying its “unlikely they have the money.”  However, social gaming has become a big part of online networking, so it’s still an interesting topic to explore, even outside of a MocoSpace acquisition.

It all started with MySpace announcing it would lay off almost half of its staff (47%) to reduce costs (well, MySpace’s demise began way before that, but we won’t get that deep).  Now the aged social network is asserting that the possibility of sell out is imminent. “With a new structure in place, now is the right time to consider strategic options for this business,” COO Chase Carey told analysts. “The new MySpace has been very well received by the market and we have some very encouraging metrics. But the plan to allow MySpace to reach its full potential may be best achieved under a new owner.”

News Corp. acquired MySpace in 2005 for $580 million, but no sound profits have been generated. Yet, Rosabel Tao, MySpace spokesperson stated that at the moment things are not that clear: “News Corp is assessing a number of possibilities including a sale, a merger, and a spinout. The process has just started.”

Despite MySpace’s poor performance in the last couple of years, News Corp. in turn has had a blossoming period: the company reported full year earnings of $4.46 billion due to its cable and broadcast TV business, healthy advertizing market, and increased subscription and re-transmission revenue.  Looks like social networking wasn’t the new face of media News Corp. had banked on.

Still, News Corp. sees no end to this MySpace situation and cannot make any other commitment to bring MySpace a revival.  “We have seen some encouraging traffic metrics in the last several weeks,” Carney said. “However, we recognize that the plan to allow MySpace to reach its full potential may be best under a new ownership structure.  The new MySpace has been very well received by the market and we have some very encouraging metrics. But the plan to allow MySpace to reach its full potential may be best achieved under a new owner.”

At its glorious beginning, MySpace took the newly minted social networking concepts and almost immediately tried to commercialize it, managing to keep its top position for a couple of years.  But as soon as Facebook overpowered MySpace,  MySpace failed to meet the demands of the fragmented marketing as niche networks like YouTube and Twitter squeezed in. MySpace is already being replaced on the music front, with services like SoundCloud tripling its number of users in half a year.

At the moment, News Corp. has no clear idea on potential buyers, but all possibilities are taken into account: ‘The interest to date has ranged from A to Z, financial players, industry players, foreign to domestic. It could be a sale, it could be a new investor coming in, it could be us staying in with restructured management,’ Carney said. MocoSpace expressed its intentions of buying out MySpace, the main attractiveness for MocoSpace being MySpace’s mobile assets.

With MySpace possibly being acquired by MocoSpace, a gaming company, we would wonder if that prospect could actually improve the lost social network. Judging by Facebook’s success with its social games which has led to their own virtual economy, the future of MySpace might seem quite promising, even if it heads further down the social gaming rabbit hole on its own.  Another success story around social network gaming is Tagged, which emphasized that social gaming has been central to their user activity during an interview at TheCUBE, which aired earlier this month.