MySpace to outsource Australian ad sales and axe half its staff

Rebekah Horne MySpace

Rebekah Horne

MySpace boss Mike Jones has confirmed that the company is cutting around half of its global staff and signalled that the site’s Australian operation is likely to be dramatically scaled back with advertising sales and content management outsourced in what may mean just a skeleton operation remaining locally.

Mumbrella also understands that MySpace Australia boss Rebekah Horne is likely to move to the US as part of the shakeup although the company has declined to comment on this.  

In a statement issued early this morning Australian time, Jones, CEO of the News Corp-owned company, said:

“Today Myspace is implementing a significant organizational restructuring that will result in a 47 percent staff reduction across all divisions globally and impact about 500 employees. With our recent relaunch as an entertainment destination for Gen Y, we introduced a much tighter focus, a significantly streamlined product and an updated technology platform.

“In international, Myspace, Inc. will be entering into strategic local partnerships in the UK, Germany and Australia to manage advertising sales and content. In the UK, Myspace will enter into a strategic alliance with .Fox Networks, with whom we have successfully partnered with in many international territories. Details about Australia and Germany are currently being finalized. Myspace will retain a core, dedicated international team to work with partners in order to ensure users, content partners and advertisers continue to be served.

“Today’s tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability. These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product. The new organizational structure will enable us to move more nimbly, develop products more quickly, and attain more flexibility on the financial side. We are also committed to rebuilding the company with an entrepreneurial culture and an emphasis on technical innovation.

“While it’s still early days, the new Myspace is trending positively and the good news is we have already seen an uptick in returning and new users. Since the worldwide rollout of the new Myspace, there have been more than 3.3 million new Profiles created. We also introduced Topic Pages, which connect users to entertainment-focused content from news sites and blogs all over the Web. Over 134,000 Topic Pages have been created since the introduction of the new Myspace. There has also been a boost in viral activities, with over 10 million social actions and 90 million “follows” within the Hubs and Topics categories. In addition, we are seeing Curators driving a lot of the engagement on our site. Users who “friend” one of our Curators increased their frequency of visits by 35 percent. Lastly, we have already seen a rise of four percent in mobile users just between November to December, now totaling over 22 million.”

Although the statement said there has been no decision made about the Australian sales operation, one obvious option would be to fold it into sister company News Ltd’s extensive digital operation. However, that may be dependent on News Corp’s plans for MySpace which it has hinted may include selling the site.

(8.55am update: A spokesman for News told Mumbrella: “NDM will not be taking on ad sales for MySpace.”)

Outside of the US, Australia is one of MySpace’s largest outposts. According to the UK’s Daily Telegraph, the international operation including Australia will be reduced to a “skeleton staff”.

The announcement had been anticipated for several days.

Jones took over MySpace last year and set a new strategy aimed at turning it into first and foremost an entertainment destination rather than social network. In an interview with Mumbrella editor Tim Burrowes last year, he was forthright about the loss of direction the company had suffered.


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