RIP, MySpace -- or What's Left of It, Anyway
Dethroned by Facebook, MySpace (NWS) had become the place where fewer and fewer people know your name. But management figured out what to do: go back to the strength, if that's what you could call if, of being a place where bands promoted themselves and music lovers followed. Well, so much for that idea, now that MySpace Music head Courtney Holt is out the door.
As Peter Kafka reported at All Things Digital, MySpace Music, a joint venture between MySpace and major music labels, still has free streaming. The site is still up, even though the labels apparently haven't been happy, and under the control of MySpace CEO Mike Jones. But all that is beside the point. What we're seeing is the final unwinding of a business.
Indie voices are great, and a deal with Songtrust to bring music publishing services to the largely unknown songwriters and groups trying to promote themselves on MySpace was actually a smart idea. Except that News Corp. (NWS), the social network's parent, laid off about half of MySpace's employees last month.
So the grand plans of the past don't matter. Who cares that MySpace bought iLike in 2009? What does it matter that the MySpace home page looks more like MSN Music than a social network?
It's so many notes over the musical bridge. News wants to sell off MySpace, either whole or in pieces. People have left in droves -- just like users. Only the separation was more painful.
So what went wrong? You could talk about the design, the spam, or even how Facebook smartly out-maneuvered its rival. But the answer really comes down to management. There have been too many mistakes over the company's lifespan. Even so, there was enough excitement that News paid $580 million for it. Management at News didn't understand the business and couldn't find its way to make it work. The decision to focus on music, gaming, and other niche areas was simply too late.
Last quarter, News wrote off $275 million related to the layoffs and took a $168 million goodwill impairment for the Digital Media Group, to which MySpace belongs. That $580 million number keeps spinning downward. There are no obvious eager buyers. It makes you wonder at what point in the near future News chief Rupert Murdoch calls it a day and pulls the financial life support plug.
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