So how will MySpace manage all of its international operations after slicing non-U.S. staff by some 65 percent? Short answer: it won’t. The social network is outsourcing its sites in Brazil, Argentina, Spain, Italy, Poland, Mexico, and Turkey to News Corp (NYSE: NWS). sibling Fox International Channels (FIC). MySpace CEO Owen Van Natta calls it the “first result” of the company’s international operational review but it’s the second one that’s gone public. The first we heard about was the plan to cut international staff to 150 from 450 and to close at least four offices.
In what’s described in the announcement as a partnership, FIC will manage local advertising, marketing, and promotion—the suggestion being that without FIC, MySpace might have had to pull some plugs. MySpace’s main contribution will be the existing sites and, well, the branding. FIC isn’t new to running websites or online ads; it operates the websites for 170 linear and non-linear channels, and already has an international online ad business. This will help MySpace manage costs while maintaining a presence. MySpace wouldn’t provide details about how the partnership will work financially.
What remains to be seen is how it will fit in with the changes MySpace is planning in terms of look and content across the board. News Corp. Chairman and CEO Rupert Murdoch referred last week to plans to reinvent as an entertainment portal. If the idea is to extend that concept globally, FIC could come in handy.
By Staci D. Kramer