News Corp. announced that MySpace co-founder and CEO Chris DeWolfe will not renew his contract with the social networking giant and will step down from his post in the near future, although he'll remain as a strategic advisor and will sit on the board of MySpace China. In addition, News Corp. said it is in discussions with MySpace co-founder and president Tom Anderson about assuming a new role in the organization.
News Corp. acquired MySpace for $580 million in July 2005, but corporate dissatisfaction has reportedly grown in recent months as rival Facebook surpassed the online community in terms of number of worldwide users and micro-blogging upstart Twitter emerged as the social media platform du jour. Last year News Corp.'s Fox Interactive Media digital unit, a division dominated by MySpace, fell an estimated 10 percent short of a much-hyped revenue projection of $1 billion. Earlier this month, News Corp. appointed former AOL CEO Jonathan Miller head of the conglomerate's digital media efforts.
"At some point News Corp. has to look at the investments and the current management team," Sanford C. Bernstein & Company analyst Michael Nathanson tells the New York Times. "It doesn't surprise me in the least." According to Nathanson, MySpace earned about $300 million from a search advertising deal with Google, but that agreement expires next year. "The company then has a potential black hole in terms of profitability," he said.
In mid-February, DeWolfe keynoted the annual Mobile World Congress event in Barcelona in conjunction with the announcement [1] of a new, more integrated and device-optimized mobile MySpace website that extends the company's global site redesign to handsets, promising a look and feel more consistent with the online MySpace experience. "I've been hearing about the mobile web since 1999, but it never came to fruition," DeWolfe said [2] at that time. "Over the last year, that's changed. I believe in my heart that [mobile's] the future."
For more on DeWolfe's exit:
- read this New York Times article [3]
Links:
[1] http://www.fiercemobilecontent.com/story/myspace-unveils-mobile-website-revamp/2009-02-17?utm_medium=rss&utm_source=rss&cmp-id=OTC-RSS-FMC0
[2] http://www.fiercemobilecontent.com/story/how-social-networking-revolutionizes-relevance/2009-02-19
[3] http://www.nytimes.com/2009/04/23/technology/internet/23myspace.html?_r=1&hpw