News Corp bought for $580m last year, and it is understood that Rupert Murdoch, News Corp chairman and CEO, is keen to explore new ways of increasing the profitability of the investment.
Under the proposals, MySpace would allow third-party companies to advertise on the site, which would give potential clients lucrative access to more than 57m registered users, many of whom are in the youth market.
Peter Chernin, president and chief operating officer of News Corp, speaking at a Deutsche Bank Media & Telecom conference that the portal had "just scratched the surface of how to monetise it", and that tapping into its predominantly young audience might hold the answer.
"We will auction off our search business to Google, Yahoo!, or MSN," Chernin said.
MySpace holds detailed information of every user's personal details, buying habits and pop culture preferences, which would allow advertisers to coordinate highly targeted campaigns.
The website has an estimated 2.4m UK users, but the website faces stiff competition from rivals Bebo, Facebook, Friendster and MSN Spaces.
Last month, MySpace was reportedly discussing a possible internet search link-up with either Microsoft or Google, as part of its plans to fend off the challenge from Bebo and Friendster.
The deal would allow Microsoft or Google supply internet searches on its homepages as well as tie-in ads.
News Corp, which also owns Fox Interactive Media and IGN Entertainment, would be able to redirect MySpace users to its media content if a deal with Microsoft, Google or Yahoo! were to go ahead.
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