MySpace lays off 47 percent of workers in rebuild

LOS ANGELES — News Corp.’s
struggling social network, MySpace, on Tuesday formalized an
anticipated restructuring that will result in the loss of 500 jobs
worldwide, or about 47 percent of the workforce.

MySpace Chief Executive Mike Jones said the job cuts were necessary to streamline operations and put the
site on a path toward profitability, following its relaunch last fall
as an entertainment destination for Gen Y.

“These changes were purely driven by issues related
to our legacy business, and in no way reflect the performance of the
new product,” Jones said in a statement. “The new organizational
structure will enable us to move more nimbly, develop products more
quickly, and attain more flexibility on the financial side.”

Jones sought to detail how the social network’s
makeover has resulted in an “uptick” in returning and new users. Since
the worldwide roll-out, he said, there have been more than 3 million
new user profiles created, and more than 134,000 topic pages that
provide news about music, movies, TV and celebrities. Moreover, people
who follow the site’s “Curators” — or taste-makers with strong opinions
in a given discipline — increased the frequency of visits by 35 percent.

“While it’s still early days, the new MySpace is trending positively,” Jones said.

MySpace executives are under pressure to reverse the
site’s fortunes and arrest the loss of subscribers and advertising
revenue. The number of monthly visitors dropped to 54 million in
November — down 3.7 million from a month earlier, according to
measurement firm comScore Media Metrix. Advertising revenue has fallen
to $347 million, down 26 percent from a year ago, based on researcher eMarketer’s most recent estimates.

News Corp. acquired MySpace in 2005 for $580 million, with Chief Executive Rupert Murdoch outmaneuvering rival Viacom Inc. to seal the deal at a time when the social network was surging in popularity. In 2006, the site scored a $900 million deal with Google
for the right to sell advertising next to searches on the site. MySpace
and the search giant renewed their search and advertising relationship
in December, although terms weren’t disclosed.

———

(c) 2011, Los Angeles Times.

Visit the Los Angeles Times on the Internet at http://www.latimes.com/.

Distributed by McClatchy-Tribune Information Services.