A year ago MySpace and Fox Interactive Media were trumpeting an upcoming office move to Playa Vista in Los Angeles. Peter Levinsohn (former) President of the no longer existing Fox Interactive Media, justified the move to the 300,000 square foot space based on the “phenomenal success” of the business, and noted that he expected “even greater growth and achievements in the coming fiscal year.”
FIM has experienced phenomenal success in its three-year history, and we have plans for even greater growth and achievements in the coming fiscal year. Given our tremendous track record, it’s only fitting that we should enter into the single biggest real-estate transaction in Los Angeles in the last 25 years. When we move to our new facility between June of 2009 and January of 2010, not only will we enjoy the distinction of having one of the largest corporate headquarters in the LA area, but we will be housed in a state-of-the-art facility that reflects our corporate identity and culture.
Fast forward through that next fiscal year and just about everything in Levinsohn’s email worked out exactly differently. Peter’s gone. FIM is dissolved. MySpace CEO Chris DeWolfe was terminated. And MySpace is facing dramatic traffic declines and the prospect of a world without Google welfare payments.
Time to cut costs. And people cuts alone won’t do the trick. Levinsohn said “Given our tremendous track record, it’s only fitting that we should enter into the single biggest real-estate transaction in Los Angeles in the last 25 years.” Now new digital chief Jonathan Miller, who has probably noted that with all the layoffs MySpace doesn’t really need all that hip new square footage, is saying they’re backing out of that transaction. In an email to all MySpace employees, Miller said:
Everyone,
Since coming on board, it’s no secret that I have asked each of the executive teams within my organization to conduct a comprehensive strategic review of their businesses to ensure that we are operating as efficiently and effectively as possible. These reviews have included a very close look at our costs and a full examination of our resource allocation – an important exercise that will help us determine whether our resources are aligned properly with our business priorities. This process is still ongoing and we will be communicating the details of the reviews as the results become available.
One immediate result is that we have determined that we will not be moving to Playa Vista. After taking many different factors into account, we have decided that the best plan for our businesses is to remain in our current locations for the near future. We’re making great progress building strong standalone businesses at each of our LA locations, and the last thing we want to do is to interfere with that momentum. In addition, the realities of the current economy make the prospects of a move incredibly expensive, a fact that I believe makes this decision not only good for our working environments, but also for
our bottom line.As I mentioned above, the strategic reviews are ongoing and I assure you that our executive teams are working as quickly as possible to determine what, if any, additional decisions will be made and we will communicate with all of you as frequently as possible in this regard.
Best,
Jon
It’s funny how MySpace PR fell all over themselves to get the word out on the new office space last year, but not a word on pulling out now. We hear the San Francisco office is next to go.
they thought they were going to be #1 haha. Maybe facebook should book playa vista to shove in their face.
That space is right around the street from me. EA is still at their Playa Vista location, but hasn’t been a big draw for new tenants.
They were number 1…too bad it didn’t last.
Yet another schadenfreude TechCrunch post.
Can’t wait for that CrunchPad to launch!
http://en.wikip...sambiguation%29
No layoff news?
yes…LA times reports major layoffs
Fox Interactive Media, suffering from a steep drop in online advertising, is preparing to lay off a significant number of employees, according to people familiar with the situation. The number and timing are in flux, but the cuts are expected to encompass a broad array of workers at the Beverly Hills headquarters.
The layoffs are part of a restructuring of Rupert Murdoch’s News Corp.’s digital operations and come only two month after former AOL executive Jonathan Miller was named chief digital officer, with oversight of media giant’s online properties. It is not immediately known how many employees will be let go, but a year ago Fox Interactive employed more than 2,000 people.
“Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure,” said a Fox spokesman. “ It’s no secret that we are looking for ways to improve our products, increase the value of our digital assets, and enhance the overall financial strength of the company.”
The interactive division of News Corp. includes the MySpace social network and a collection of other online businesses, including IGN Entertainment, and entertaiment movie and product review site RottenTomatoes.com. In the most recent quarter, the News Corp. said Fox Interactive’s revenue was down 11% from a year ago, reflecting a precipitous 16% drop in advertising. At the same time, costs rose 7% due to expenses associated with developing new features at MySpace.
MySpace’s troubles have been widely publicized, culminating in the departure this spring of co-founder and chief executive Chris DeWolfe.
People familiar with the restructuring plans say MySpace will bear some of the burden of the cuts, but other divisions will also be affected.
The once-dominant social network has been surpassed by rival Facebook in terms of number of worldwide users. Another technological upstart, the microblogging application Twitter, generates more buzz among the technorati. The latest online traffic report from measurement firm comScore Media Metrix said Facebook and Twitter each added millions of new users, outpacing growth at Fox Interactive.
One industry analyst said all social networks, including MySpace, are struggling to figure out how to make money from their audiences. Spending on Internet advertising for the first quarter of the year is also down by 5%, compared with a year ago, according to the Interactive Advertising Bureau and PricewaterhouseCoopers LLP.
“The online networking space overall hasn’t turned out to be as lucrative as people originally thought. That’s one of the biggest problems,” said Charlene Li, founder of the Altimeter Group, a research firm specializing in social networks.
In another sign of cost-cutting, Fox Interactive is also seeking to sublet new offices being built at Playa Vista development south of Marina del Rey. The group had agreed to rent 421,000 square feet of space, so it could consolidate its far-flung digital operations.
– Dawn C. Chmielewski
http://latimesb...ve-updated.html
There are a lot of people that I really like that are still at FIM/MySpace and I don’t envy them during the next few months as the new upper management realizes how big a mess they have been left with.
they should move to geocities.com that’s where they’re headed.
FIM also just had to pay out a $5 million lawsuit to a bunch of sports websites they skimmed money from.
http://benkoo.c...mer-publishers/
While I think this is big news and broke the story on my blog, Fox has gone to great lengths to squash anything on this story. At least that side of the PR team is doing their job.
It’s a popularity contest on Myspace. All the kids that it appealed to before are now entering college and universities. Myspace didn’t grow with the kids, and the chaos on some of the pages of Myspace users that over-customize make too many user pages terribly unfamiliar. Facebook evolved with great attention to detail. It’s not perfect, but its close. If Myspace wants to survive this freefall, and keep subscribers, they need a fully re-vamped Myspace 3.0. From the bottom up, and they really need to do it fast. I doubt they can, they went far too long in the wrong hands, and dug themselves a massive hole. Competition waits for nobody
Being #1 won’t last for most social networks….just saying.
I worked at MySpace for a brief stint. As few months after I joined I was looking for an exit. Senior leadership is not that smart. So sad, they really don’t have a chance. It’s safe to say MySpace is heading down the path of irrelevance. They picked the perfect team to lead that charge now. Ex AOL exec’s will get the chance to ride this one all the way to the bottom…just like AOL… “You got FAIL!!! Good Bye”
It wouldn’t surprise me for the situation Myspace is in when they couldn’t ditch out the costly managers who are wasting company money and resources and pull the company down on the back.
These managers have serious issues that the execs aren’t aware of yet:
http://blogs.ws...eractive-media/