• MySpace’s newly appointed CEO Owen Van Natta officially took over as CEO of MySpace today. He sits at the bottom of a gigantic traffic slope that is Facebook. On a global basis, Facebook attracted more than twice as many visitors in the month of March as arch-rival MySpace.
• Facebook had an estimated 294.7 million unique visitors in March, 2009 on a worldwide basis, compared to 125.7 million for MySpace. Facebook gained 19 million visitors during the month, while MySpace gained only 2 million. Pageviews for MySpace have seen a drop of 20 percent since January (to 37.9 billion). Facebook has seen growth of 22 percent in pageviews to 87.3 billion (Schonfeld, TechCrunch)
• There are a few things going for MySpace, which caused Owen to take on the task. First, they are still the dominant social network in the US (although not for too much longer). One of Facebook’s problems is their surging amount of international traffic, which is notiously difficult to monetize. Being the top social network in the US is the best market for advertisers (let the internationals go to Facebook, they aren’t worth the bandwidth). Second, MySpace does still dominate the social music scene, and by now they are honing in on more than 10 billion song streams under the new MySpace Music. They are making money with nearly every stream, the one business model Facebook is still envious of MySpace for. Third, MySpace is said to bring in more than double the amount of revenue than Facebook. With MySpace Music included, revenue should be close to $1 billion this year, even in the down economy. Fourth, being the former COO of Facebook, Owen knows the weaknesses of his new rival’s organization. This can play to his advantage.
• His biggest concern as CEO will be retaining his current member base (those already gone to Facebook aren’t coming back, ever). If I were CEO, I’d be looking to capture the youngest possible audience to adopt MySpace before they get their hands on the vastly superior Facebook user experience. There is no way around it, MySpace is the new PC, you must get to them young, or they will go to the dark side (or the bright side?), Facebook (Apple). I would also try to strike deals with hardware manufacturers such as HP, Dell, etc. Just as Yahoo and MSN try to get their homepage/search engines as the default, going through the setup process to boot up your new machine should include an auto MySpace profile (unless of course you already have a profile). This could guarantee an extra couple hundred million potential members per year that may adopt the service or at least try it out. All acts of desperation. If you were CEO, what would you do to save MySpace from the abyss?

Update: Former MySpace chariman Rich Rosenblatt weighs in on what he would do to save the company.

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• Every year, good ol’ Steve Ballmer shows up to Wall Street for his annual “Strategic Update” briefing with analysts on February 24. Despite rising anticipation, the Microsoft CEO said Office 14 won’t be shipping in 2009. MS execs more than a few times last year hinted that the latest enterprise software package would be seen in 2009. Customers can expect to see a beta version this summer, but don’t expect the real thing to drop until at least Q1 2010. Despite some issues with bugs at the moment, Windows 7 is still set to release in Q3 of this year. Why they wouldn’t want to release the latest versions of Windows and Office at the same time, I have no idea. Ballmer must have something up his sleeve if he is willing to wait that long to release an ugraded software package. It leaves companies like SalesForce and ZoHo a whole year to perfect their cloud solutions, further eating away at the gian’t market share.

• In a depressing earnings call today with the NewsCorp team, Rupert Murdoch outlined the $6.4 billion loss. Murdoch said “the downturn is more severe and likely longer lasting than previously thought.” and “We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate.”
• MySpace earnings fall underneath the Fox Interactive Media section, which also includes products like PhotoBucket. MySpace is thought to bring in the majority of the revenues coming in from FIM. Here is what they had to say on the issue: “Fox Interactive revenues: $226 million revenues. Down due to reduced subs at IGN. Search and advertising were simliar to a year ago. Costs were MySpace Music and international expansion”. The entire division lost $38million.
• I guess Murdoch and Sam Zell (purchased Tribune) were wrong to assume paper media is going to stay strong through the next 5 years. Cuts have already been made across the board, and there is no end in sight to how bad it will get.

Other must read NewsCorp/MySpace Articles:

LEAK: MySpace’s Recession Plan Is To Outsource

Michael Wolff: MySpace Users Are Doomed, Poor

MySpace MyAds Producing 160K A Day

• Fox Interactive chief Peter Levinsohn says that 2009 will be an “even rockier economic climate” and the company is taking steps to cut costs at each of their properties. Number one thing to go is part-time/contracted staff as well as FREE lunches. Don’t they know that lunch is where co-workers share ideas the most? Google would go under before taking away their employee cafes.

• 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?

• Michael Wolff, author of The Man Who Owns the News: Inside the Secret World of Rupert Murdoch, released this morning, sat down with BusinessWeek’s Jon FIne and provided a not so glamorous take on MySpace.
• On MySpace’s $25 billion+ valuation: “It doesn’t make any difference. That’s gonna go down. What they are looking at is the distinct possibility that it can go down to nothing.”
• On MySpace users being tied to the site’s community: “That’s exactly what they said about AOL. Your email was there, because your friends were there. I mean, AOL operated actually as the community of its day… What they saw at the time was that [users] were absolutely wedded to AOL. That was Time Warner’s bet on that.”
• On MySpace users: “If you’re on MySpace now, you’re a [expletive] cretin. And you’re not only a [expletive] cretin, but you’re poor. Nobody who has beyond an 8th grade level of education is on MySpace. It is for backwards people.”

Do you agree with Michael’s assessment of MySpace?

SAI

• Nielson Online just announced that Facebook’s traffic has broken 2/3rds the size of MySpace.
• Myspace has been puttering around 58.4 million uniques, while Facebook added another million users in September, bringing their uniques for October to total of 39.9 million.

Mashable

• MySpace COO Amit Kapur revealed at the Web 2.0 Summit that they are working on their own own virtual gift service as well as a payment system that MySpcae App developers can add to their offering.
• The virtual gifts thing is a no brainer, but the payment system will be interesting. Does it mean developers will be creating apps that are good enough to charge for? Or does the payment system mean they will have an in-house ecommerce infrastructure for rolling out their own Merchandise, Concert Tickets, and Ringtones applications that are supposedly coming soon. I think the latter.

TC

• MySpace MyAds, is a service which lets users create or upload an advertisement, which can then be circulated around MySpace for a minimum CPC of $0.25.
• An inside source says that MySpace is already makking $140-180K a day with the new offering.
• I still don’t believe it.

TC

• The Television networks and Hollywood studios, once the ninjas in banning copywritten user-uploaded clips, may be changing their minds.
• MTV Networks is teaming with MySpace to run advertising on both legally and illegallly uploaded clips from “The Daily Show with Jon Stewart,” “Punk’d” and other shows that have been uploaded.
• Auditude, a Silicon Valley startup, is providing the advertising technology.
• YouTube launched a similar system last year that identifies video clips and offers copyright holders a choice between removing the material or revenue sharing with YouTube on ads shown across the content page.
• This is a huge step for Hollywoood.

LATimes, TechCrunch

• CNET confirmed that MySpace has offered MTV Networks’ EVP Digital Music and Media Courtney Holt the CEO job at MySpace Music
• Courtney is said to be in the final stages of the process and has possibly already taken the job.

TC

• Upgrade to Profile 2.0 and have the ability to customize your profile layout without the need for HTML or code pasting. 
• You can also protect certain parts of your page by hiding you age, comments, videos, etc. from others.
• There are plenty of profile editing websites out there not happy about this switch. It took MySpace so long to do it, who would have thought they would roll it out now? 

• Jamster is the annoying ringtone company that has been making a killing the last 5 years, blowing the ringtone business into a billion dollar industry.
• It has been one of my biggest surprises that no one has marketed an easy to use free software that lets you edit and deploy a song onto one’s mobile device. (maybe it exists, but something is keeping it from going mainstream)
• The smash hit iTunes app store proved that Jamster’s mobile game business will be in jeoprady once platform standardization is ubiquitous.
• Now, the Android App market has launched with the first ever approved Free Ringtone Editor, which comes preloaded in the app store and does exactly what it sounds like.
• Currently the recording industry makes $6.8B a year on ringtones and is projected to become an $11.6B industry by 2010!
• Will a simple ringtone editor app on smart phones be the catalyst to take down the new giant money maker for the music biz? At least Jamster deserves it after making me watch 3 years of commercials that play a god awful pimp cup remix songs, prompting me to key in a number if I want it as my ringtone.
• It will be interesting to see how the 2 million G1 Android phones that come out this week begin to affect ringtone profits, and how soon it will be before there is a litigous situation claiming that a ringtone is a seperate entity? Look pal, if I own the song already, I shouldn’t have to pay for it again to have it as my ringtone.

What do you think will happen?

VentureBeat, Open Source, Datamation, Crave, GigaOM, Gearlog, Startup Wire, Lost Remote, internetnews.com, TG Daily, Alice Hill’s Real Tech News, AndroidGuys, Gizmodo, TC, CNET News, InfoWorld, Mashable!, AndroidGuys, 901am, CrunchGear and Engadget Mobile

• Jeff Berman, president of sales and marketing at MySpace, told VentureBeat that they were on track to hit $1B in revenue this year.
• It took Google 6 years to achieve a $1B year, and MySpace is in its 5th year.
• MySpace says they have some strong areas that make them a lot of revenue including:
  • Guranteed revenue deal from Google for search
  • Diversified user base (they have more Nascar fans than Nascar.com and he says 40% of all mothers are using it!)
  • Advertising campaigns (front page hero ads and the new MyAds)
  • Music (MySpace Music has always made money off of music promotion, now they make money from music streams and eventually ticket sales, merchandise, concert, etc)
• MySpace certainly took its beating from Facebook with its sluggish design and spam problems. Now Facebook is the one in the passenger seat.

VentureBeat, Contentinople, The Social Times and WebProNews

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