As hinted at two weeks ago, the pink slips have arrived at MySpace as NewsCorp preps the loser for sale or perhaps even closure. In this mess is there vindication for Tom Freston?
Back in 2005, MySpace was the it girl of the web. Millions of users, but, like most other web properties, not exactly making money, and no clear plan to profitability.
Sure there was hope that it would become wildly profitable. But as they say, hope is not a plan.
Tom Freston, the newly minted CEO of Viacom, a well-liked founder of MTV, was in a bit of a pickle. He was in the middle of a pissing war between his boss, Sumner Redstone, and NewsCorp’s Rupert Murdoch.
Both wanted MySpace, but for whatever reason, Freston walked away — letting NewsCorp have the prize at a cost of $580 million. Maybe Freston was gun-shy because he wasn’t an aggressive deal maker. Maybe he wasn’t an “irrational exuberance” kind of guy.
Or maybe he saw MySpace for what it was — an overpriced money pit.
Months later, Murdoch declared, somewhat unconvincingly, that the site was worth $6 billion. About that same time, Sumner fired the wildly popular Freston.
Talk about a lose-lose.
NewsCorp took its new prize, and did, frankly, almost nothing.. There were a couple of acquisitions, like Photobucket, but overall the site just sort of sat there — with ugly, dated design, clunky navigation and interface, and increasingly, a lack of self-awareness.
While a deal with Google for ad space initially allowed NewsCorp to make back its investment, it was back to bleeding cash shortly thereafter.
The killer was complacency. MySpace did little to improve the user experience and fun factor, and Facebook cleaned its clock. There’s a lesson for all of us there.
A revolving door of respectable names came and went; none of them able to figure out what MySpace really was, what it could be, and above all, how to make money with it.
Tuesday, MySpace blew out 500 employees — about 50% of its staff. And while it says it has 100 million users, most measures of traffic put that number at around 80 million.
80 million is a pretty big number. But is a smaller MySpace a better MySpace? Not likely. The brand is very damaged and is likely heading toward the scrap heap that grabbed other early social media sites like Friendster and Tribe.
While MySpace will attempt to re-trench as a music and entertainment destination, sites like Bandcamp are eating away at the foundation.
Tom Freston? He’s helping launch OWN — the Oprah Winfrey Network, and chairs the RED campaign.