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Other terms were also disappointing: instead of getting all its money in cash, News Corp will receive shares in Specific Media and it will also have to hang on to a minority stake in My Space.

The collapse in the site's value has tracked a collapse in the number of people using the site, and the amount of time that they spend there – and a consequent collapse in demand to place ads on the site, which is where Mr Murdoch hoped to make money.

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In the US alone, My Space has lost more than half of its regular visitors since its peak in December 2008, and had just 34.8 million users last month; Facebook had 157.2 million.

"My Space is a recognised leader that has pioneered the social-media space," Specific Media's founder and chief executive Tim Vanderhook said.

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Specific Media is paying m (£22m) for My Space, compared with the 0m News Corp paid for the site in 2005.

Mr Murdoch was already resigned to making a loss, but yesterday's sale price was far below the 0m he expected to get when he put the business up for sale earlier this year.

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