News: MySpace facing grim future

Social networking site MySpace, long one of the leaders in the field and at a time bigger than the now gargantuan Facebook, is set for a shaky few months ahead.

The website is owned by Rupert Murdoch's News Corp., and just a day after firing almost half the site's staff (500 people in all), the company announced that it is considering the possible sale of the website.

According to Bloomberg, MySpace CEO Mike Jones today discussed the website's future at a company-wide meeting. Spokesperson Rosabel Tao said, “News Corp. is assessing a number of possibilities including a sale, a merger and a spinout. The process has just started.”

News Corp. originally purchased MySpace and its parent company eUniverse for a massive $580 million in July 2005.

MySpace has been floundering for quite some time and News Corp. hoped the site would see more favourable profits after a major redesign was carried out last year. This was however not enough to stop Facebook's inevitable march to social networking domination as MySpace generated less than $100 million in the year ended in June.

If News Corp. decides to create a spinoff website, the company plans to help fund the business and current MySpace employees would be eligible for shares in the independent company, according to two people who attended the MySpace meeting.

Last October's redesign might not have been as successful as MySpace undoubtedly hoped, but the new entertainment and youth centred website did manage to lasso up a further 3.3 million profiles while mobile users rose 4% to more than 22 million.

Even so, MySpace's future is looking grim as it is getting harder and harder to compete with more firmly established brands such as Facebook and Twitter. Maybe MySpace should ask the guys from Zynga to create some addictive Farmville-esque games for the site, it seems to have worked for Facebook.

MySpace facing grim future

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