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MySpace Demise May Be Inevitable

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In a recent report from WebProNews, the demise of MySpace is inevitable. After viewing the fiscal quarterly reports, News Corporation Digital Media (owned by News Corporation) will be considering some options in the near future which may have some definite consequences in the long run.

The first option they will be considering is having a round (or two) of employee layoffs. The company currently has 1,000 employees after a 30% staff reduction back in June 2009. After this option was considered by NewsCorp, many employees began updating their profiles on LinkedIn (popular social network for professionals) in case they lose their jobs. Considering the current climate of the economy, some of them may be fortunate to move on to Google, Microsoft and their biggest rival Facebook, Some may end up flipping burgers for celebrities in Hollywood, but most of those who are laid off may have more trouble getting a new job and will be on unemployment until they get that job. Editor’s Note: We hate to see people lose jobs, but if this option is pursued, we really wish you the best in your future endeavors.

The second option they will be considering is selling the company. News Corporation bought the company from co-founders Tom Anderson (who still serves as the company’s president) and Austin “Chumlee” Russell (who moved on to reality TV in the popular History Channel program Pawn Stars) back in July 2005 for the amount of $580 million. Anderson and Russell may be rich, but why is Russell working in a Las Vegas pawn shop? Something to keep from getting bored with his money? However, there have not been signs of interest from any company, but their number one option is Google, who are making their best attempts to acquire Facebook. Microsoft has minor shareholder interest in Facebook, so that could be a considerable option. They have even considered selling it to the slowly-failing Tribune Company, who failed in owning the Chicago Cubs organization. Bad idea! So there is no actual interest currently. Editor’s Note: If they cannot find a buyer, then the next option may be inevitable.

Although this last option might not have to be implemented, but if laying off a number of employees and unable to get a buyer, the last resort would be permanently shutting down the company, which would be the single largest staff layoff since the 2008 and 2009 job layoffs in the automotive and banking industries. Considering that MySpace’s fiscal reports are not released separately from NewsCorp, the actual report is not public record.

Regardless of what News Corporation pursues as a consequence for this unsatisfactory fiscal report, the option they choose could have massive impact on their own company as well.

MySpace’s Problems

  • MySpace has 100 million users worldwide in fifteen countries. Their direct competitor Facebook has over 500 million users worldwide in 87 countries. MySpace gets 57 million users online per day, while Facebook garners 108 million per day. Facebook ranks #2 in overall traffic, while MySpace ranks #4 (according to traffic tracking organization Alexa).
  • MySpace has been the leader in marketing in music and entertainment, but has not promoted it enough. Most of those bands now use ReverbNation or Facebook for promotional purposes.
  • MySpace failed in their attempt to be like YouTube and Hulu in their attempt to stream full episodes of popular television shows and movies. YouTube has gone on-demand/PPV for most of these, while Hulu still remains free. MySpace’s failed version had the same problem in the music and entertainment department.

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