This is a sad day for the folks that were laid off and one just has to wonder how did MySpace go downhill so fast? Today, News Corp, MySpace’s parent company, announced a restructuring effort(layoff) that would affect about 500 people or roughly %47 of the company. Nobody is surprised as the rumors have been around for months that this was coming.
There such high hopes for MySpace back in 2005 when News Corp bought MySpace for $580 million swooping in at the last second to outbid rival Viacom in the bidding. At the time, people wondered about the financials and how it would all work itself out. Initially it was good, the deal all but paid for itself when Google inked a three-year $900 million search advertising deal in 2006. From the very start though, people wondered if a company like News Corp could effectively run a site like MySpace and it looks like we found the answer. Back then MySpace was the biggest and baddest social network on the block but has since been reduced the role of has-been by Facebook.
We want to put this into perspective though, as a web property MySpace is still very valuable and still gets about 60 million visitors a month, but that is less than have of the 150 million monthly visitors Facebook attracts. Most people think this latest layoff is an attempt to lean the company up and make it more attractive to potential buyers such as private equity firms or even Yahoo and Google. Either way though, this will come to a head sooner than later as News Corp COO said that MySpace had quarters and not years to turn itself around.
I know what I think, but what do you think went wrong with MySpace? Does it still have a chance to turn around and become relevant again under the right ownership? Let us know in the comments.