A person familiar with the matter tells the Associated Press that if the sale goes through, MySpace will likely lay off more than half of its 500 employees.
At least three bidders are said to be still in the running - online advertising network operator Specific Media, private equity fund Golden Gate Capital and Austin Ventures, an investment fund that is working with MySpace co-founder Chris DeWolfe.
News Corp. CEO Rupert Murdoch once predicted MySpace would make a billion dollars in annual revenue. This year, analysts said the site is expected to make less than one-fifth of that amount.
The Associated Press contributed to this story.