MySpace cuts 500 jobs

Times just aren't getting any better for MySpace, with the company yesterday announcing it would lay off 500 workers.

Rumors of impending job cuts had been circulating for some time and intensified in November last year when MySpace owner News Corporation admitted it was open to selling the site, which it bought for US$580 million in July 2005.

The 500 jobs to be lost represent about half of the Beverly Hills-based company's workforce. In a statement published in full by The Wrap, MySpace CEO Mike Jones attempted to hose down suggestions the job cuts were a sign the once-dominant social networking site was on the way out.

''Today’s tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability. These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product'' he said.

By ''new product'' Mr Jones was referring to the site's October 2010 ''relaunch'' which shifted the focus of the site away from social networking - an arena it has largely conceded to Facebook - and towards the provision of music and other entertainment content for Gen Y users.

Mr Jones claimed MySpace is ''trending positively'' and the company has seen an ''uptick'' in new and returning users. His comments were at odds with a Los Angeles Times report today which claimed News Corp. is still entertaining the idea of selling the site, possibly to Yahoo. As the Times points out, Yahoo would make an odd match for MySpace, considering the once-popular search company has in recent times endured job cuts of its own.

Sources have told the LA Times MySpace's downfall began once the site lost the interest of media magnate and News Corp. owner Rupert Murdoch, leading to management infighting and general stagnation. Whatever the reason, analysts and observers remain skeptical that MySpace can be revived.

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