Just because Rupert Murdoch is slowly taking MySpace off life support doesn’t mean the newspaper magnate is giving up on the digital world altogether. According to what sources are telling The Wall Street Journal, the site, which is owned by Murdoch’s News Corp., is gearing up for a “dramatic downsizing of its business.”

One source told the Journal that the site could lay off between one-third and half of its roughly 1,100 employees. Another source revealed that the downsizing may be announced as soon as this month.

But while the move may herald a gradual end to the social networking site, the Journal also reports that News Corp. and Apple plan to unveil The Daily in the days to come – a digital newspaper for Apple’s wildly popular iPad.

Rumors abound that the The Daily will be introduced at an event at the San Francisco Museum of Modern Art on Jan. 19, and that Apple’s very own Steve Jobs will be on stage to personally tout the new partnership. 

Despite the fact that a subscription is required for full access to WSJ.com, there’s no word yet on whether there will be a fee to read The Daily.

Just last month, TechZone360.com reported that research firm Digitimes reveals that Apple is expected to release three versions of the iPad 2, supporting either or a combination of WiFi, UMTS and CDMA, for 2011 with mass production to start as early as the later half of January.

The report also reveals that Apple will ship upwards of a whopping 530,000 units to channels in January with shipment ratio of WiFi, UMTS and CDMA models at 3:4:3.

In November, TechZone360.com cited another Digitimes report that revealed that Foxconn Electronics, Apple's China-based tablet manufacturer, has added several new assembly lines to crank up production rates in order to satisfy consumers’ insatiable appetite for iPad devices.