Just as Facebook climbs to new heights
its aging rival MySpace is slashing its staff in a last-ditch effort to
save itself. On Tuesday, the company laid off 47 percent of its
workforce, lopping off 500 employees from its nearly 1,100-person
payroll. As company morale plummets, rumors that MySpace's parent
company News Corp. wants to sell are everywhere
. Meanwhile, industry observers are treating MySpace as a cautionary tale for those who would describe any social networks as "unstoppable
- What Went Wrong? "MySpace was like a big party, and then the party moved on," says former MTV Networks President Michael Wolf. "These Internet businesses tend to have a cycle. There's a lot of
people who wonder if the same thing will happen to Facebook." Jeremiah Owyang,
a technology industry analyst at Altimeter Group, says the problem was
innovation. "Myspace didn't change their design, upgrade their
demographics to expand, and they didn't inject a culture of innovation.
So they stayed complacent and they're seeing the results of that."
- News Corp Is Mulling a Sale, reports Russell Adams
at The Wall Street Journal: "Myspace notified staff of the long-rumored
cuts Tuesday, weeks after parent company News Corp. put the one-time
Internet pioneer on notice to shape up or potentially land on the
auction block. While there are no signs that Myspace is actively being
shopped around, according to a person familiar with the matter, News
Corp. is open to the possibility."
- Morale Is Suffering TechCrunch's Michael Arrington
received a letter from a purported MySpace employee who describes the
attitudes of lower-level workers at the company. According to the
disgruntled employee, MySpace executives had "driven hundreds of people
to work hard for months, giving 20 hour days, even 48 hour sleepless
stints" in the run-up to the layoffs:
As it turns out, Mr. Jones
and his lieutenants knowingly *used* their employees, working them hard,
making them give up time with their friends and families, knowing all
along that no matter how hard they worked, and how successful their
efforts, many of them would be rewarded with layoffs.
- If You've Lost Tila Tequila, You've Lost Middle America The New York Times finds that the social network's biggest celebrity doesn't even use the service anymore:
Tila Tequila, the model and rapper who achieved fame by building an
audience on MySpace, has switched allegiances. In 2006, Time magazine called her the queen of MySpace, but these days she prefers Facebook.
“I just lost my passion for MySpace,” she said in an interview, adding
that she does not even remember her MySpace password, even though her
page still lists 3.7 million fans. “I haven’t logged on because it’s not
- There May Be Hope in MySpace's Redesign, notes Anthony Ha
at VentureBeat: "As evidence that the redesign is starting to catch on,
[CEO Mike] Jones said that since the redesign rolled out at the end of
last year, more than 3.3 million new profiles have been created as well
as 134,000 topic pages. The number of mobile Myspace users increased 4
percent between November and December, he said, to 22 million."
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