MySpace's decline has been well chronicled, but the company hit its lowest point yet when it laid off 47% of its staff yesterday. While MySpace tried to claim that its new design shows promise, the reality is that there is no way to sugar-coat slashing half of your staff.
That's not all, though. Today, MySpace CEO Mike Jones has confirmed what we've suspected all along: The company is looking for someone to buy the failing property before it's too late.
“News Corp. is assessing a number of possibilities including a sale, a merger and a spinout [sic]. The process has just started," MySpace's Rosabel Tao recently told Bloomberg after a company-wide briefing from Jones.
At this point, there's little doubt that News Corp. wants to unload the money-draining Internet property. News Corp. could once justify its MySpace acquisition just from the hundreds of millions that Google paid it as part of its multi-year search deal.
However, while MySpace renewed its ad deal with Google last month, we hear that the terms were shifted significantly in Google's favor. In the old deal, MySpace was guaranteed around $900 million in search revenue. In contrast, there is no guaranteed money at all in the new deal. MySpace's revenue stream has been greatly reduced, and no redesign will bring Google's money back.
A few weeks ago, we predicted that News Corp. would sell MySpace this year. We just didn't expect that the media company was looking to offload its toxic Internet asset so soon. Oh, how the mighty have fallen.