Exclusive: Myspace in Advanced Deal Talks With Investor Group, Including Activision's Kotick

And then there was one?

According to sources close to the situation, News Corp. is down to one possible investing group in its quest to make lemonade out of the lemon that its Myspace social entertainment hub has become.

In the lastest of many scenarios considered, several sources said its owner, News Corp., will continue to own about 20 percent of Myspace. The main bidder is a dark horse bidding group, which includes Activision Chairman and CEO Bobby Kotick as one of the potential investors.

The deal, cautioned sources, is not final and could easily fall apart.

Interestingly, if such a deal is struck, he would apparently be involved as an individual and not for the giant gaming company, and would play no management role in the company.

Kotick would presumably need permission from Activision for such a high-profile investment, even if he played a smaller role.

Kotick’s possible involvement has not been mentioned in previous reports.

Sources said the other possible bidders — including music video service Vevo, a group including Myspace founder and former CEO Chris DeWolfe, an internal effort by current CEO Mike Jones, several private equity firms and even myYearbook — mentioned in past reports have not worked out for various reasons.

Vevo had seemed the likeliest winner, but its bid appears to have foundered for now, due to the complex nature of its music label ownership.

It is not clear what the price will be for Myspace, which was once the leading social networking site before the world dis-Liked it for Facebook.

One thing is certain: It is nowhere near the $100 million that News Corp. reportedly sought.

The site — even after an overhaul to focus on entertainment — has recently been losing money and traffic, although it is still a large destination on the Web.

News Corp. declined comment, as did Kotick.

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Is There a Myspace Mafia, Too? Because Leaving Seems to Have Paid Off for Many Ex-Execs.

When the selling of Myspace winds down in the next week or so, it’ll probably attract a spate of comments about what a failure the whole social networking enterprise turned out to be.

And — especially when you recall what a Web phenom the social networking site was before it got blown out of the water by Facebook — it was.

That is, unless you think of the mob of former execs who have worked at the company over time, many of whom have moved on to some more golden opportunities after leaving the News Corp.-owned property.

That includes, most recently and notably, former sales head Michael Barrett, who is about to score big as CEO of AdMeld, which is reportedly in the process of selling to Google for $400 million.

Also a big winner: Former Myspace CEO Owen Van Natta, who was fired from that job in one of its many putsches and who quickly rebounded to a top job at online gaming powerhouse Zynga.

So, while it is one of the more overused memes of Silicon Valley, the “mafia” analogy — which has been applied to fertile entrepreneurial breeding grounds such as PayPal, before its acquisition by eBay — is useful when thinking about Myspace.

It is also a good thing to keep in mind about any tech company that goes off the rails: There might still be a silver lining, even if the start-up never sees the light of day again.

As proof, herein is a list I created after pinging a bunch of former Myspace folks:

Jason Oberfest: Former SVP of business development. Now, VP Ngmoco, which was sold to Japanese gaming giant DeNA for $400 million last year.

Dmitry Shapiro: Former CTO, Myspace Music. Now, at Facebook competitor Altly.

Adam Bain: While at Fox Interactive Media, he ran the ad platform for Myspace. Now, head of sales at Twitter.

Jeff Berman: Former president of sales and marketing. Now, GM of the NFL’s digital media unit.

Jason Hirschhorn: Former co-president and chief product officer. Now, on MGM board, angel investor, and there are rumors of him working on a curation start-up.

Amit Kapur: Former COO. Now, CEO, Gravity, an information filtering service start-up.

Chris DeWolfe: Co-founder and former CEO. Now, CEO, MindJolt, an online gaming roll-up.

Ross Levinsohn: Former president of FIM, he was integral to buying Myspace. Now, EVP of Americas unit, Yahoo.

Mike Lang: Former News Corp. strategy exec also involved in Myspace purchase. Now, CEO, Miramax.

Aber Whitcomb: Former CTO. Now CTO, MindJolt.

Jim Heckman: Former chief strategy officer of FIM. Now, CEO of 5to1, recently sold to Yahoo for $25 million.

Dani Dudeck: Former communications head. Now, PR head at Zynga.

Travis Katz: SVP of international. Now, CEO of Gogobot, a social travel start-up.

Richard Rosenblatt: Former CEO of Intermix Media and Chairman of Myspace, he sold it to News Corp. Now, CEO of Demand Media.

Angela Courtin: Former SVP of marketing. Now, EVP at Aegis Media.

These folks should be on the call list of whoever ends up buying Myspace. Last week, I wrote that an investor group, including Activision head Bobby Kotick, is now in the lead for the deal.

As an update, according to sources, Kotick has gotten clearance from Activision’s major shareholder Vivendi to do the Myspace transaction as a passive personal investment.

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