April 11, 2011

MySpace To Lay Off Another Round Of Employees

Robert Murdoch's News Corp., which purchased the social networking website MySpace in 2005 for $580 million, is in talks with various entities in the hopes of selling and cutting its losses. To make the site more attractive to potential suitors, News Corp. has announced another round of layoffs.

News Corp. seems to have grabbed the once-popular, glittery site just as it was beginning to nosedive in popularity and Murdoch's millions have not provided a soft landing, AFP reports.

Chief Operating Officer for News Corp., Chase Carey put MySpace employees on notice in November, telling them that financial losses at the social network were unsustainable and that layoffs were unavoidable.

In January of this year, News Corp. revealed that it was seeking a sale or other "strategic options" for MySpace, which found millions of members leaving in droves for Facebook, which at around 500 million user accounts, which shows no signs of slowing down in popularity. After that announcement, MySpace sent pink slips to almost 50 percent of its workforce, leaving approximately 500 employees remaining. 

One bright spot among the MySpace rubble is the fact that it is still used by many small, independent bands looking to connect and expand with their audience. This has caught the attention of some online music-based businesses. Among the interested parties are believed to be music video service Vevo, China-based Internet company Tencent and private equity firms.


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