MySpace to cut 30% of staff

June 16, 2009 – 2:59 pm

by Rolfe Winkler, CFA

That sound you hear is the social media bubble popping.  From PC World:  MySpace Staff Slashed Almost 30%

The restructuring continues at MySpace, whose staff will get cut by almost 30 percent, the News Corp. division announced Tuesday.

MySpace’s staff is “bloated” considering the “realities of today’s marketplace,” which prevents it from operating with efficiency and innovation, MySpace said in a statement.

The layoffs will affect all U.S. divisions and will leave MySpace with about 1,000 employees in the country.

Once the undisputed champion of social networks, MySpace has seen its growth stagnate over the past year, while Facebook surpassed it to become the most popular social-networking site in the world….

Facebook, MySpace and other advertising-supported social-networking sites have found it more challenging than originally thought to generate revenue that is consistent with their massive user bases. Conventional online ads, like pay-per-click text ads and graphical banner ads, don’t work as effectively in social networks. Consequently, social-networking sites are busy trying to design new ad formats that will yield better results for marketers.

If the Twitter or Facebook guys get a decent offer, our advice would be to take it.

  1. One Response to “MySpace to cut 30% of staff”

  2. The triumph of Facebook over MySpace stems from classism. MySpace is for the common folk. Who wants to be common?

    By John on Jun 16, 2009

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