Friday, January 7, 2011

Myspace woes continue

Trends In Retail

Myspace woes continue

Myspace woes continue ~ Trends In Retail
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Trends In Retail

Trends In Retail

Myspace woes continue

Myspace, a once fruitful social networking site, is now at a crossroads in what to do next with the websites future. Founded in August 2003, Myspace quickly found itself as the dominant player in social networking surpassing other sites such as Bebo and Hi5. Seeing what many calling its best years from 2004-late 2008, Myspace still was a dominant player, but with the rise of Facebook, Myspace has slowly lost a lot of its traffic to the now current player in social networking. Facebook added new features to attract traffic to the site which has aided in the decline of Myspace.

Over the last few years, as Facebook became the dominate player in social networking which has prompted its ailing competitor to make changes to its music service, videos, layouts, and various other parts of the site. Last year Myspace even implemented the option to connect via Facebook login. The other 2010 updates to the stream, profiles, and colours of the site were that of what Facebook has done already. This was done in an attempt to attract users back to Myspace, but some see this as a sign that Myspace is falling to Facebook.

While there has been speculation that Rupert Murdoch's News Corp has been looking to sell off Myspace, they would have to sell the ailing social networking site at drastically less then what they paid for it like AOL did when they sold Bebo. News Corp bought Myspace for $580 million in 2005. It was even valued at $12 billion when News Corp attempted to merge Myspace with Yahoo. News Corp’s chief operating officer Chase Carey has described the site as a “problem” and said that a sale or partnership with Internet giants such as Yahoo or AOL were two of a number of options under consideration.

Carey, who has previously described Myspace’s losses as "neither acceptable or sustainable" has refused to set a deadline for the social networking site to return to profitability before it pushes ahead with a sale. "I'm not going to break down [the number of] quarters," he said. "It's not years... we need to deal with this with urgency." But Carey also said the company’s engineers had done a "very good job" at redesigning Myspace to help it better match market leaders Facebook and Twitter. He said it would have been "pretty tough" to sell Myspace before the revamp.

With the restructuring, Myspace is cutting jobs internationally with cuts in the UK and Europe. In 2009, the website closed offices in four countries. When Myspace announced the closing of those offices, it cames weeks after Myspace laid off 420 jobs from what Owen Van Natta, the then Myspace chief executive, described as its "bloated" United States operation. Myspace's international employees was expected to go from 450 to 150 during that time. The United Kingdom is the biggest base for Myspace outside of the United States. Van Natta said: "MySpace's staffing had become too big and cumbersome to be sustainable in current market conditions. Today's proposed changes are designed to transform and refine our international growth strategy."

"With roughly half of Myspace's total user base coming from outside the US maintaining productive and efficient operations in our international markets is important to users worldwide and our immediate financial strength," he added.

Now in 2011, Myspace will layoff most of the people from it's international offices. "Everybody is expecting some kind of announcement next week," said a digital executive close to Myspace. "And there is not much hope left for the international offices. A few staff will probably remain, but essentially, everybody at MySpace is expecting the international operation to be closed down. MySpace isn't making money and News Corporation needs to cut more costs dramatically."

After last years swingeing cuts, the only Myspace international offices which remain are in London, Berlin and Sydney.

London and Sydney’s respective offices employ around 55 people each, while Myspace’s Berlin office employs around 20 staff. The United States will see 50 percent of the Myspace employees laid off which has the majority of the Myspace employees.

As of June 2010, Myspace has an about 66 million users. It has also slipped to 25th in the Internet rankings.

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