News Corp. was widely derided for its purchase of MySpace for $580 million (Rs2,378 crore) just two years ago. Its fast growth and advertising deal with Google has already guaranteed $900 million worth of revenue. Yet, the social networking site is a lost cog in the media leviathan. This may explain why News Corp.’s boss Rupert Murdoch has reportedly pondered injecting the site into Yahoo for a chunk of the Internet group’s stock.

This would have several advantages for both companies. Yahoo missed the boat on social networking—and MySpace is the leader in the field. A partnership would also allow cross-company traffic, which could increase the value of both companies’ content. But for Murdoch, the most important benefit would be to crystallize value that’s being overlooked by his shareholders.

Credit Suisse, for example, estimates that MySpace’s value within the publishing and television giant is about equal to its original purchase price. It would be a lot harder to overlook a large chunk of stock that can easily be priced, or sold, on the market. So, what could MySpace be worth? One report has News Corp. asking for up to 25% of Yahoo. At Yahoo’s current value, that’s some $10 billion. Yahoo’s competitive situation may appear distressed, but it’s probably not that desperate.

Murdoch said himself late last year that he could sell MySpace for $6 billion. This may have been a tossed-off number at a conference, but it looks about right. The site may now be bigger, but its growth rate has slowed. Rival Facebook is growing far faster.

Moreover, the numbers seem to work. MySpace might have $750 million worth of revenues next year. Yahoo is valued by the market at six times estimated 2008 sales. At eight times— which factors in a premium for its faster growth—MySpace is worth $6 billion.

Considering that many News Corp. shareholders more or less overlook the site, a deal that put a figure anything close to that on MySpace would be a bonus for Murdoch.