The category of News Corp's business that includes MySpace lost $174 million in the fourth quarter, worse than the $136 million it lost in the same period last year, the parent company said during its earnings call this morning.

But News Corp plans to stick with the beleaguered social networking site, the company said, and a "major overhaul" will be finished in a few months.

MySpace has been struggling for years to remain relevant alongside more trendy sites like Facebook and Twitter. Worse, its lucrative advertising deal with Google will expire or be renegotiated on less favorable terms at the end of this month, News Corp said.

News Corp bought MySpace as part of a $580 million deal in 2005. It described MySpace at the time as "the leading lifestyle portal for networking online," and claimed it was the fifth most popular site on the Internet and was home to more than 8% of all Internet advertising.

But Facebook surpassed MySpace as the most popular social network worldwide in 2008, and the original blockbuster social network seems to be falling further from mind.

Advertising is MySpace's only source of revenue and (sound familiar?) the company has historically had trouble "monetizing its large audience." But News Corp CEO Rupert Murdoch insists that MySpace has a new management team and bright prospects. "We have great confidence," he said today.

MySpace is working on improving its news feed, as we reported yesterday, and introduced integration with Twitter. News Corp hasn't said when exactly the site will be changed. In the meantime, News Corp still has Fox News and DVD sales of "Avatar" to keep it profitable while MySpace figures things out.