The news comes a day after the former social networking high-flyer slashed nearly half of its staff.
News Corp, which paid $580m (£366.3m) for MySpace in 2005, believes a spinout would be the most logical route, it is understood.
That option would likely entail someone from the venture capital or the private equity community investing in MySpace, thereby altering the current ownership structure.
The company launched a new version of the site in October centred on music, movies and entertainment for the 35-year-old-and-under crowd.
At an all-staff meeting yesterday, MySpace chief executive Mike Jones announced that parent company News Corp was exploring strategic options for the site.
A News Corp spokeswoman added: “We are looking at a number of strategic options for the business, including a sale, merger or spinout.”
News Corp chief operating officer Chase Carey said in November that the company was exploring all options for MySpace, including a sale, and told investors that month that MySpace had quarters rather than years to turn itself around.
Once the top internet social networking site, MySpace has been eclipsed in recent years by Facebook, which now has more than 500m users and was recently valued at $50bn .
On Tuesday, MySpace announced that it was laying off 47 per cent of its staff, or about 500 employees. Shrinking MySpace’s losses will be key in attempts to shop it to would-be buyers.