MySpace preparing massive job cuts

 

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By Reuters

Posted on 12 Jun 2009 at 08:44

MySpace is ready to cull 500 of its 1,600 staff, according to reports.

MySpace refused to comment on the story reported by the TechCrunch blog, which claims the company is attempting to cuts costs in order to keep pace with Facebook.

The story comes just two months after former-Facebook Owen Van Natta took over as chief executive: "Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure," says a MySpace spokeswoman.

"It's no secret that we are looking for ways to improve our products, increase the value of our digital assets and enhance the overall financial strength of the company," she finishes.

News Corp's $580 million purchase of MySpace's parent company in 2005 was considered among analysts and media experts as a brilliant move by Murdoch to enhance the media conglomerate's digital portfolio.

Since then, advertising revenue has deteriorated and Facebook and Twitter have surpassed MySpace in buzz and popularity in the technology and media worlds.

A search and advertising deal with Google will expire in July 2010, and it is unclear whether the two sides will renew. MySpace derives $300 million a year from that deal, and most Wall Street analysts believe there is no chance that Google will forge a deal on similar terms.