MySpace has been sold again. Rupert Murdoch’s News Corp, which bought MySpace in 2005 for $580 million, is selling all but 5% of its shares to advertising company Specific Media, which is partnering with pop star/actor Justin Timberlake, for $35 million.

MySpace got its start in 2003, when Chris de Wolfe and Tom Anderson launched the social network as a place for friends to connect and for musicians and artists to present their portfolios for their fans to follow. Many musicians, such as Lady Antebellum and Lilly Allen, got a huge boost from MySpace early in their careers, based on their fans downloading sample tracks from the artists’ MySpace pages and afterward buying the whole CD.

The social media trend has become the next big internet boom, with companies like Facebook, LinkedIn, and Twitter being staples of everyday life for millions of users. MySpace was one of the forerunners, outpacing its contemporary, Friendster, and setting the bar for the upstart Facebook. The once-mighty social network, which at its peak in 2008 had more than fifty million members, double that of Facebook, has fallen drastically. Now its membership is spiraling and sits at around forty million, while Facebook is still flying high with 150 million members and counting. What went wrong?

Industry analysts point the finger partially at News Corp. When Murdoch’s massive media empire took possession of MySpace in 2005, it was burgeoning in popularity. While MySpace reached its summit of memberships in 2008, three years after News Corp’s purchase, there were many warning signs that a fall was coming. MySpace had not been developed as aggressively and progressively as it should have been, to keep it relevant and competitive with Facebook and the other new networks on the block. Considering the shelf life of a dot com, executives should be aggressive in pursuing ways to keep their product as hip and fresh as possible, and this was not how News Corp handled MySpace. There were actually several changes made to MySpace that caused millions of users to stop frequenting the site, citing too many ads, rampant technical glitches, and even spam and viruses.

Now, MySpace’s 500 plus employee force will be pared down by half. Although the exact financials of the deal brokered between Specific Media and News Corp have not been released, the $35 million is supposedly composed of a mixture of stock and stock. Interestingly, Justin Timberlake is said to be taking a “major role” in the MySpace overhaul, and will have an owner’s stake in the company. This is not the first time Timberlake has taken an interest in business, since he is also the owner of several golf courses, restaurants, and other successful commercial ventures.