LEAK: MySpace’s Recession Plan Is To Outsource

• MySpace, the second largest social network in the world, yet the most profitable, has made a major change in its infrasructure to increase its profitability over Facebook.
• What’s this secret change? They have begun outsourcing jobs including a significant portion of development to India in a move to cut costs during the recession.
• In a recent trip to India, MySpace CTO, Aber Whitcomb and VP of Development, Jim Benedetto, named a new VP of outsourcing.
• His name (confirmed) is Nannu Pahpar and he is to oversee MySpace’s entire overseas coalition to cut costs by managing a team of developers amongst other jobs in India.
• MySpace compared to Facebook, has been notorious for spending less money on hiring top notch developers and have focused more on revenue. The new MySpace Outsource Center is further proof of this and it aims to cut infrastructure costs as much as 1/3.
• It is rumored that MySpace profits for the year will be somewhere around $900 million. This move including their new succesfful MySpace Music venture should easily put them over $1 billion in revenue in 2009.
• This is something that is not possible for Facebook who is consistently hunting for the top developers in the United States with high salaries coming out of places like Google and Microsoft.
• With the current recession, Facebook could be hurting and their recent move to delay the allowing of employees to sell their stock is further proof that they are worried about their valuation and future of making money.
• As for MySpace, the outsourcing is smart, but MySpace is widely recognized as an American based social network and to shift jobs overseas is going to be a highly scrutinized move both inside and outside the company.
• Do you think MySpace should be outsourcing jobs?

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