IT Insider: Expect More Changes at MySpace

It sounded a little fishy when MySpace (News - Alert) owner New Corporation announced last week that one of the social networking site’s co-founders – Chief Executive Officer Chris DeWolfe – would be stepping down “by mutual agreement.”

 

In some ways, the move itself wasn’t a total surprise.

 

About a year ago, Facebook (News - Alert) eclipsed MySpace in overall users. Facebook has more than 200 million to MySpace’s approximately 130 million. MySpace remains the largest social network in the United States, but membership is slowing and even falling. According to comScore Inc, U.S. membership fell 4 percent year-over-year last month, to 70 million.

 

Those are troubling numbers for Rupert Murdoch, especially considering this one: The media behemoth’s News Corp (News - Alert). paid $580 million nearly four years ago.

 

Also troubling is evidence that Facebook is on the rise, with its “Facebook Connect” development tool for the Apple iPhone, integration with Netflix and rumored native integration with handsets from Nokia, among other developments.

 

Now, we’re hearing from the Los Angeles bureau chief of BusinessWeek that a major cultural shift is coming to MySpace, signaled by the sudden departure of DeWolfe.

 

Ronald Grover reports that News Corp. will throw money and personnel behind efforts to expand MySpace’s music site and efforts in video gaming, as well as “to add more originally produced TV shows to the small but growing number that MySpaceTV produces.”

 

“And there will be plenty of joint promotions between MySpace and other News Corp. properties – say, a promotional spot on the Fox network’s American Idol or at halftime of an NFL pro game,” Grover reports.

 

If anything, it’s unusual that it would take News Corp. this long (Murdoch is not known for his deference) to leverage its other properties.

 

According to Grover, the arrival at MySpace’s headquarters of News Corp. media veterans – he calls them “Old Media” hands, a reference to their pre-modern-Internet backgrounds – such as Jonathan Miller, a former Nickelodeon executive, not only marked the beginning of the end for DeWolfe, but bad news for fellow co-founder Tom Anderson, who has been relegated, “to some as yet undeclared role within the company.”

 

Other Old Media types now in MySpace’s boardroom, Grover says, include: ex-Facebook Chief Revenue Officer Owen Van Natta; former MTV digital executive Jason Hirschhorn; and Michael Jones, whose Web-tool outfit Userplane was bought by AOL (News - Alert), a News Corp. property.

 

“Also, while News Corp. has envisioned MySpace as an advertising vehicle to offset the decline in sales for some of its more traditional media outlets, MySpace is still closely wedded to Google (News - Alert), whose $250 million in annual ad sales provides more than one-third of MySpace’s total ad sales,” Grover reports. “That deal is scheduled to expire next year, and News Corp. insiders say the site will be hard pressed to find another as lucrative.”