The 50-50 joint venture with U.S. media group News Corp will shut down at the end of January and be liquidated, the Nikkei reported. The Japanese-language service will be taken over by U.S. firm Myspace LLC, the newspaper added.
News Corp acquired Myspace for $580 million in 2005, when it was among the world's most popular websites, and the company's success in beating out rival Viacom Inc in a bidding war was viewed as a major victory for Murdoch.
However, since then Facebook eclipsed Myspace in popularity and in June, News Corp sold the website to advertising company Specific Media LLC and singer Justin Timberlake at a fraction of what it had paid.
News Corp continues to own its stake in the Japanese unit, the Nikkei said.
Launched in November 2006, Myspace's Japanese service tied up with record labels and sought to tout itself as a way for artists to reach fans. But it failed to offer attractive content, and had only signed up about 1.08 million users as of August, not even a 10th of Facebook's tally, the paper said.