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After shelling out $580 million for MySpace and getting little to show for it, News Corp is ready to administer some tough love to its under-performing Web property.
Myspace CEO Mike Jones recently addressed his site’s relaunch, saying, “This marks the beginning of an exciting turning point for MySpace.” Turns out that might have been wishful thinking. Parent company News Corp announced yesterday that the social site’s future will be judged “in quarters, not years.” Translation: you’ve got months to turn this thing around.
MySpace’s losses have spiraled out of control, and rose to $156 million this year. There are rumblings of layoffs in the near future, and as News Corp President Chase Carey put it during the company’s earnings conference, “Our current management did not create these losses, but they know we have to address them.”
At the same time, Carey sounded hopeful for MySpace’s future, and that with its’ new focus on entertainment and music, the site was at least trying to solve its problems. Still, traffic and advertisers are down, way down, and the “clear path to profitability” that News Corp wants to see has yet to be blazed.
News Corp acquired MySpace for $580 million, and hasn’t seen an impressive return on investment.
This is mostly due to Facebook’s emergence as the world’s dominating social network shortly after the deal. MySpace has clearly struggled since, and it very well may be that no amount of rebranding is going to save it. In a digital world where everything is more and more centered around the Facebook platform, it isn’t difficult to imagine MySpace fading out. So for the handful of users left, enjoy it while it lasts.