MySpace recently announced plans for cuts and closings company-wide including 300 jobs oversees, 420 US-based positions and 4 overseas offices, ultimately leaving them with just over 1100 worldwide employees and overseas offices in London, Berlin & Sydney. MySpace is a subsidiary of News Corp, which also owns the NY Post and Fox Broadcasting. Following is an excerpt taken from the Huffington Post.
“The move, the latest cost-cutting effort at the site, comes less than two months after the unit of Rupert Murdoch’s News Corp. hired former Facebook executive Owen Van Natta, 39, as its new chief executive.
It also comes a day after data from tracking firm comScore show Facebook has caught up with MySpace in monthly U.S. visitors for the first time.
“Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company,” Van Natta said in a statement.
The cuts amount to about 420 people, bringing the total number of MySpace’s U.S. staff to 1,000. As of May, Facebook had about 850 employees worldwide, the vast majority in the United States.
MySpace’s user base has stagnated at about 125 million worldwide users, while Facebook said its usage has doubled to more than 200 million in less than a year.
Until now, MySpace still had the edge among U.S. users. But numbers from comScore show that in May, MySpace and Facebook both had about 70 million users apiece in the United States.
MySpace generates more revenue, according to Internet research firm eMarketer; it estimates that MySpace generated about $605 million in global advertising revenue last year, compared with $250 million for Facebook. MySpace’s revenue is expected to shrink next year while Facebook’s is seen as growing.”
It seems as though sometimes we need a little “push” to trim the fat…in life and in business. For a long time, Myspace was the only social networking game in town and really dominated the market. However as the above excerpt shows, this is no longer the case.
I say that competition is good. Good for business, good for the consumer. What do you think?