MySpace slashes staff by 47 percent as sale rumors grow

Fading social networking site MySpace cut 47 percent of its staff--about 500 employees in all--in a broad restructuring spanning all of its operations. MySpace is shifting its focus away from its social media roots to instead emphasize digital music content: "Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," MySpace CEO Mike Jones said in a statement. "These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product." According to Jones, more than 3.3 million new user profiles have been created since MySpace unveiled its redesigned site in late October 2010--in addition, mobile users rose 4 percent between November and December to more than 22 million.

News Corp. acquired MySpace for $580 million in mid-2005--the site's fortunes have dwindled in recent years as users have migrated to rivals like Facebook and Twitter, and insider buzz indicates MySpace will be put up for sale once the restructuring process is complete. In a research note to clients, Evercore Partners analyst Alan Gould forecasts News Corp. will shutter MySpace by June "unless we see a remarkable turnaround in the next few months," adding that News Corp.'s Fox Interactive Media unit, which includes MySpace, will lose $225 million during this fiscal year, up from an estimated $180 million a year ago. 

For more:
- read this Bloomberg article

Related articles:
News Corp. squashes MySpace sale reports
MySpace issues mobile app SDKs for iPhone, Android
MySpace unveils mobile website revamp