A Sad Day At Fox Interactive – No More Free Lunches

Don’t expect big layoffs at MySpace parent company Fox Interactive Media any time soon. In an email to all staff on Friday, Fox Interactive chief Peter Levinsohn says that 2009 will be an “even rockier economic climate” and takes steps to reduce costs. Chief among the changes – the end of the free lunch program for all employees (the French would riot over such an outrage).

Levinsohn also says he has avoided a hiring freeze. But if you are a contractor or temporary employee, watch your back and steal those office supplies now. Shortly after returning from the holidays you may find yourself being walked out of the building.

The memo also details the successes of FIM companies over the year (MySpace, IGN, Rotten Tomatoes, Photobucket, Fox Sports, etc.).

The full memo is below:

With the end of the calendar year approaching, I want to take a moment to thank everyone for making 2008 a year full of milestones and accomplishments for all of FIM’s businesses. In spite of a challenging economic environment, the last twelve months have produced some great results, none of which would have been possible without your dedication and hard work.

Unfortunately, 2009 is shaping up to be an even rockier economic climate, and while I am convinced we hold an incredibly unique position in the marketplace and have great potential for success going forward, we will be making some hard and necessary decisions about how we run our business in this environment. I’ll outline a few of those decisions below, but first I want to share some of the past year’s accomplishments:

· MySpace launched MySpace Music — a groundbreaking joint venture with major and independent music labels — and the MySpace Open Platform, which included the launches of the MySpace Developer Platform, MySpaceID, and Post-To MySpace.

· MySpace also continued its aggressive international expansion strategy — launching in seven new countries — and is now fully localized in 30 territories.

· FIM Audience Network was formed and launched self-serve ads on MySpace, a program which now has more than 15,000 participating advertisers.

· IGN launched a groundbreaking video initiative that includes more than a dozen of the Web’s most cutting-edge content creators.

· FOXSports.com produced more video content than any other sports site — including live content for the World Series, the Super Bowl and the BCS Championship Game. Scout.com continued its full product and management integration into FOXSports.com, enabling the two sites to deliver an even better experience to college and high school sports fans.

· Photobucket built out a world-class advertising team and released over 10 major new products, including group albums, themes and its API to the developer community.

· The new Digital Publishing Group launched its Web Content Management and Digital Asset Platform for FOX Television Stations and a number of third-party television station groups.

· Rotten Tomatoes completely redesigned its site and this week announced a deal with Current TV to co-produce “The Rotten Tomatoes Show”.

· GameSpy powered the online functionality for a number of the year’s top videogames, including Grand Theft Auto IV; Direct2Drive began selling games from EA for the first time ever, and featured some of the hottest titles of year from publishers like Ubisoft, Bethesda and Rockstar.

· AskMen continues to be the Web’s leading men’s lifestyle site and attracted more than 13 million unique users in October – an all-time high – while bringing on board a number of first-time FIM advertisers such as Porsche, Gucci and Calvin Klein.

· FIM Mobile distributed free, ad-supported mobile Web versions of every FIM site and is now a leader in ad-supported mobile Web, with a cumulative audience of 15M unique users per month.

While we’ve had some incredible success this past year, it’s impossible for us to ignore the larger economic environment and the challenges that are facing businesses all over the world. As a result, we are taking proactive steps to align our businesses practices with the economic realities that we will face in 2009. Some of these steps will be painful in the short term, but they are necessary to put our company in the best possible position to succeed now, and more importantly to emerge even stronger once the markets recover.

FIM’s success is the product of our incredibly talented people, and the retention of that talent is always our number one priority. We have approached this process with this priority at the forefront of our thinking.

We have taken several initial steps. First, have we have reprioritized our hiring needs for the remainder of the fiscal year. By doing so, we avoided instituting a hiring freeze and will continue to invest in our most promising opportunities. We have also taken a detailed look at our use of contract and temporary workers, and will be scaling back our use of those services in favor of internal resources wherever possible. Second, we will be closely monitoring, and cutting back on travel and expense budgets for the remainder of the fiscal year — please discuss any travel plans with your manager. And finally, we have made the decision to discontinue all meal subsidy programs currently being offered at FIM locations, effective January 1, 2009. Right now, it is imperative that we all work together to create savings and to maximize value – and these are all vital steps to this end.

Despite the challenging economic environment in which we will be operating, I am incredibly confident in our position within the marketplace. We have made a conscious effort over the last several years to build our business from the ground up in a manner that delivers maximum value at minimal cost not only to FIM, but to our advertisers and business partners. As a result, we are now in a great position to respond to the needs of the market at a time when our services are not only valuable to our partners, they are critical.

Thank you for your continued hard work and I look forward to seeing you all in 2009 as we work together to execute our plans and engage the challenges that lie ahead.

Happy Holidays,
Peter Levinsohn