It's no secret that News Corp. wants to wipe its hands of MySpace, the once popular digital playground that's seen all the cool kids pick up their gear and head over to that other social networking website, the one with over 500 million members. The question is, how much can News Corp. get for MySpace? That will depend on whether or not there are any buyers to begin with, which News Corp. will reportedly find out later this week as it puts MySpace up on the auction block.
Frankly, if someone had told us that MySpace was just going to be shuttered, we would not have been surprised. But it looks like the sale is going ahead and bids from no fewer than half a dozen potential suitors are expected this week. If that wasn't shocking enough, the value News Corp. insists on getting out of the faltering social site is something else.
It was just a few years ago in 2008 that MySpace was on the top of their game, pulling in $900 million in revenue. A year later, management started leaving as page views dipped. Now MySpace is up for sale, and the pitch book for prospective buyers has been leaked. It paints a pretty grim picture of the once great site's future.
New numbers from Comscore indicate the demise of MySpace is happening faster than most had expected. Between January and February 2011, MySpace lost 14.4% of its monthly users. In raw numbers, that's a drop to 63 million from 73 million. They had twice this many users a year ago.
It looks like News Corp might finally be ready to dump its faltering MySpace social network, according to Paid Content. News Corp has taken a $275 million charge on its most recent quarterly earnings thanks to all the losses incurred by MySpace. Management seems not to be satisfied with just redesigning the site an laying off staff, they're ready to get out. News Corp COO Chase Carey said the new metrics were looking up, and they were looking at "strategic options". "But the plan to allow MySpace to reach its full potential may be best achieved under a new owner," he added.
The site was once the darling of the social web, but after its acquisition by News Corp, the site's fortunes quickly turned. With the decrease in traffic, advertising revenue was down quarter after quarter. Most observers believe the cuts in recent months were made to get the division ready for sale. This talk about good metrics is probably mostly bluster to put a happy face on things. News Corp is hoping to attract offers, but who would be willing to take the risk?
With more and more members flocking to Facebook, MySpace is taking drastic action to cut costs and possibly prepare itself for a sale. The struggling social network slashed its workforce nearly in half, handing out pink slips to 500 of its 1,100 employees, USA Today reports.
"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," MySpace CEO Mike Jones said in a statement. "These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product."
MySpace has been trying desperately to reinvent itself and attract a younger audience. In October, MySpace launched an overhauled version of its site geared towards music, movies, and entertainment, and while the site still sees some 60 million visitors a month, it's still way behind Facebook, which sees 150 million visits on a monthly basis.
Credit MySpace for once dominating the social networking scene and, more recently, trying to reinvent itself as an all-around entertainment epicenter. But let's be real, MySpace blew its opportunity to become what Facebook already is, and there doesn't appear to be room for both to coexist.
According to AllThingsD.com, things are about to get worse. Layoffs loom for perhaps as much as 50 percent of MySpace's workforce, AllThingsD.com says, which works out to around 550 pink slips.
Citing "multiple sources familiar with the situation," AllThingsD.com says nothing is a done deal, but all employees have been put on notice to start saving their pennies. The suits in charge are also batting around the idea of selling MySpace, though there's no word of any potential buyers.
Minnesota Vikings coach Brad Childress gave up on Randy Moss after just three weeks. It's taken New Corp. five years to reach that same level of discontent with MySpace, the social networking service it paid $580 million for back in 2005, Yahoo News reports.
"We've been clear that MySpace is a problem," News Corp. CEO Chase Carey said during a conference call with analysts. "The current losses are not acceptable or sustainable. Our current management did not create those losses but they know we have to address them."
Reading between the lines it sounds like MySpace might not be long for this world, but Carey insists the social networking service "has the potential to be an exciting business." The caveat? He wants to see improvement within the next few quarters.
"These are fluid businesses... I think it is something we look to judge in quarters not in years," Carey said when asked how big of a window MySpace would have to show improvement.
Let's not kid ourselves, MySpace, while once the hottest social networking destination in cyberspace, is now yesterday's news courtesy of Mark Zuckerberg and a little place called Facebook. Ever since Facebook steamrolled over MySpace on its way to 500 million members, the once popular social portal has struggled to regain relevance, and the company hopes a facelift (and change in focus) will do the trick.
Currently in beta form, the redesigned site puts a lot of emphasis on entertainment integration in hopes of attracting a younger, more hip audience.
"This marks the beginning of an exciting turning point for Myspace. Our new strategy expands on Myspace's existing strengths -- a deep understanding of social, a wealth of entertainment content and the ability to surface emerging cultural trends in real time through our users," said Mike Jones, CEO of Myspace. "Myspace is unique in that it is powered by the passions of our users, who program the site by expressing interests, sharing tastes and knowledge around particular topics, and scouting out up-and-coming subcultures. This is the just the first step and there will be many more features, programs and improvements to come."
The beta site sports a new user interface along with new features like content hubs, personalized streams, a discovery tab, and more. Registered users have the ability to toggle between three different views, including List view (tradtional setup), Grid view (a magazine-like format), and Play view (a video format that allows users to watch, forward, and resize their updates to full screen).
Check out the full announcement here and watch the video below.
MySpace has been forking over user data to advertisers that can potentially be used to identify user profile pages, but don't worry, MySpace says it isn't a problem, MSNBC reports. Huh?
Here's the deal. MySpace freely admits to sharing user data, such as user IDs and the last page visited, but doesn't consider the data to be information that could identify a person, in part because members of the social networking site aren't required to use their real names. As a modern day Spock would say, "This (bleep)ing (bleep) ain't logical."
Third party apps are participating in the data sharing frenzy too. MySpace shares user IDs with app developers but doesn't allow the data to go any further. That's all well and good if everyone plays fair, but that isn't always the case. MySpace recently had to (briefly) suspend an app called "Tagme" because of repeated violations to this policy, but was since reinstated because the developers "complied within a matter of hours."
Privacy has become an even hot topic (more so than usual) in the social networking space as of late. During a recent Wall Street Journal investigation, it was discovered that several popular apps on Facebook, including Farmville, were blatantly ignoring privacy settings and sharing user information without consent.