The 80-year-old billionaire used his Twitter account, started on New Year's Day, to make the frank admission.
News Corp acquired MySpace for $580m (£361m) in 2005, but the site soon lost ground to new market entrants Facebook and Twitter.
Last year, News Corp sold the business to advertising company Specific Media and Justin Timberlake for around $35m (£22m), only 6% of what it originally paid.
"Many questions and jokes about My Space," Murdoch tweeted. "Simple answer - we screwed up in every way possible, learned lots of valuable [and] expensive lessons."
MySpace was an early trailblazer in social networking, allowing users to share their interest in music and other things via their profiles.
However, the site dropped out of the UK's top ten social networks for the first time in its history last month, and was recently described as a "cesspool that no-one wants to visit" by its co-founder Tom Anderson.
News Corp is understood to have retained a small stake in MySpace, but is not involved in its day-to-day operation.
Murdoch has spoken out before about the six difficult years spent as owner of MySpace, saying at the News Corp annual shareholder's meeting in October last year that he made a "huge mistake" with the acquisition.
"We bought it [MySpace] for $600 million. We could have sold it for $6 billion a month later," he said.
Murdoch admitted that it was an error to keep relaunching the site in an attempt to cope with the emerging threat of Facebook, involving three different MySpace chief executives coming and going during the six-year period.
At the time of the Specific Media deal in 2011, Gartner analyst Michael Gartenberg noted: "This was a good example of how to turn $580 million into a lot less virtually overnight."
Murdoch recently suffered another blow in his stuttering digital strategy after cloud-based music streaming service Beyond Oblivion, of which News Corp was an investor, folded before it launched.