Instead, the panel found Drew guilty of three misdemeanor offenses of accessing computers without authorization. Each count is punishable by up to a year in prison and a $100,000 fine. Drew could have gotten 20 years if convicted of the four original charges.
U.S. District Judge George Wu declared a mistrial on the conspiracy count. There was no immediate word on whether prosecutors would retry her.
"I don't have any satisfaction in the jury's decision," said Drew's lawyer, Dean Steward. "I don't think these charges should have ever been brought."
Tina Meier, the mother of the dead girl, said Drew deserves the maximum of three years behind bars.
"For me it's never been about vengeance," she said. "This is about justice."
Prosecutors said Drew and two others created a fictitious 16-year-old boy on MySpace and sent flirtatious messages from him to teenage neighbor Megan Meier. The "boy" then dumped Megan in 2006, saying, "The world would be a better place without you."
Megan promptly hanged herself with a belt in her bedroom closet. Prosecutors said Drew wanted to humiliate Megan for saying mean things about Drew's teenage daughter. They said Drew knew Megan suffered from depression and was emotionally fragile.
"Lori Drew decided to humiliate a child," U.S. Attorney Thomas O'Brien, chief federal prosecutor in Los Angeles, told the jury during closing arguments. "The only way she could harm this pretty little girl was with a computer. She chose to use a computer to hurt a little girl, and for four weeks she enjoyed it."
O'Brien, who pronounced the case the nation's first cyberbullying trial, said the jury's decision sent a worthy message: "If you have children who are on the Internet and you are not watching what they are doing, you better be."
Most members of the six-man, six-woman jury left court without speaking to reporters. One juror, who identified himself by his first name only, Marcilo, indicated jurors were not convinced Drew's actions involved the intent alleged by prosecutors.
"Some of the jurors just felt strongly that it wasn't tortious and everybody needed to stay with their feeling. That was really the balancing point," he said.
The case hinged on an unprecedented - and, some legal experts say, highly questionable - application of computer-fraud law.
Drew was not directly charged with causing Megan's death. Instead, prosecutors indicted her under the federal Computer Fraud and Abuse Act, which in the past has been used in hacking and trademark theft cases.
Among other things, Drew was charged with conspiring to violate the fine print in MySpace's terms-of-service agreement, which prohibits the use of phony names and harassment of other MySpace members.
"This was a very aggressive, if not misguided, theory," said Matt Levine, a New York-based defense attorney and former federal prosecutor. "Unfortunately, there's not a law that covers every bad thing in the world. It's a bad idea to use laws that have very different purpose."
Drew's lawyer, Steward, contended his client had little to do with the content of the messages and was not at home when the final one was sent. Steward also argued that nobody reads the fine print on service agreements.
Prosecutors said Drew, her then-13-year-old daughter Sarah and Drew's 18-year-old business assistant Ashley Grills set up the phony MySpace profile for a boy named "Josh Evans," posting a photo of a bare-chested boy with tousled brown hair. "Josh" then told Megan she was "sexi" and assured her, "i love you so much."
Grills allegedly sent the final, insulting message to Megan before she killed herself in the St. Louis suburb of Dardenne Prairie, Mo.
Missouri authorities said there was no state law under which Drew could be charged. But federal prosecutors in California claimed jurisdiction because MySpace is based in Beverly Hills. Sarah Drew testified she never saw her mother use the MySpace account. But Grills, testifying under immunity from prosecution, said she saw Drew type at least one message under the name Josh Evans.
After the suicide, Missouri passed a law against cyber-harassment. Similar federal legislation has been proposed on Capitol Hill.
The trial's outcome was a victory for prosecutors despite the lack of a felony conviction, said Nick Akerman, a New York lawyer who specializes in cases involving the federal computer act.
"What you learned is that the Computer Fraud and Abuse Act is an extremely important tool in the federal arsenal against computer crime," he said.
MySpace said in a statement that it "respects the jury's decision and will continue to work with industry experts to raise awareness of cyberbullying and the harm it can potentially cause."
Associated Press Writer Thomas Watkins contributed to this report.