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Digital
MySpace losses increase, News Corp chief talks tough
By CMU Editorial | Published on Friday 5 November 2010
Earlier this year I half-jokingly/half-seriously suggested MySpace would go off line on 17 Nov. Given the flagging social networking company is planning on rolling out its new look site in the UK this month – following its unveiling in the US last week – that’s probably not going to happen. But this month might just prove to be the beginning of the end for the one time social media giant.
MySpace has been put “on notice” by its owners, Rupert Murdoch’s News Corp, after quarterly losses in the company’s digital and other activities rose by $30 million to $156 million.
Even though MySpace had arguably peaked even before it was bought by News Corp for $580 million in 2005, the site still enjoyed substantial traffic for a few years, mainly as a result of it being the primary online base for nearly every band in the world. That traffic resulted in pretty respectable ad revenues, which kept News Corp happy.
But MySpace was already in decline as users jumped to other more user-friendly less frustrating social networking services, in particular Facebook. The mass exiting from MySpace has continued, and gets worse as more and more bands shift their social media activity to Facebook and Twitter. The growth of services like SoundCloud, which provide a compelling alternative to MySpace’s one USP – it’s easy to use, easy to manage music player – also hasn’t helped.
Various executive shuffles and culls have since followed as News Corp, who had hoped to see their big MySpace investment start to pay off by now, are instead seeing the red figures on their spreadsheets getting bigger. Various service relaunches have occurred, the most recent, the one due to roll out in the UK this month, widely seen as being MySpace’s last chance to secure a long term future.
News Corp COO Chase Carey this week told investors that it was clear that MySpace was “a problem”, adding that “traffic numbers are still not going in the right direction” and that News Corp chiefs would be reviewing this part of their business “in quarters, not in years”. That implies that MySpace bosses need to turn round their company’s fortunes within the year or Carey and Murdoch will be reaching for the big off button.
Presumably execs in the social networking company really hope their latest revamp works. Part of me does too. But many commentators reckon – however nice the new MySpace might look, and even if all the technical foibles that have dogged the service for years have been fixed – it’s all too little too late. The social networking world has moved on.
So, how about 17 March for the MySpace switch off party? I do feel we are approaching the end of an era in the world of Web 2.0.
