This morning, when MySpace announced the decimation of its international staff (300 out of 450 non-US staff will be let go), CEO Owen Van Natta pinpointed the global offices he considers dispensable. He released a statement saying that while the London, Berlin and Sydney offices will be preserved, MySpace will look to “restructure” the offices in Argentina, Brazil, Canada, France, India, Italy, Mexico, Russia, Sweden, and Spain and plans to close four offices all together.
Considering Facebook’s massive growth both internationally and now in the U.S., we thought it would be instructive to compare the number of unique visitors to Facebook and MySpace in each of the countries which MySpace has identified for layoffs and restructuring. All together, the countries account for only about 15 percent of MySpace’s global unique visitors (see chart at right). But more tellingly, in practically every single country where layoffs are coming, Facebook has already won.
The graphs below speak for themselves but here are a few numbers as well (all from comScore). In India, Facebook had 6.4 million unique visitors in May, compared to 848,000 unique visitors to MySpace. In Argentina, Facebook had 5.5 million unique visitors in May, compared to 611,000 unique visitors to MySpace. In Spain, 7.2 million for Facebook, versus 1.5 million for MySpace.
MySpace’s growth has been stagnating for quite some time now. Worldwide monthly page views for MySpace declined from 47.4 billion a year ago to 38 billion in April, a 20% drop. In that same period Facebook grew from 44 billion to 87 billion, a roughly 100% increase. MySpace’s user number growth has stalled out also, and developers are reporting that activity on MySpace is decreasing at a dramatic rate, as high as “half a percent a week.” And in our most recent model of the true value of social networks, MySpace fell below Facebook, dropping from the top spot last year.
Things aren’t going to get prettier for MySpace anytime soon. As Michael Arrington wrote in May, MySpace will receive its last “welfare payment” from Google (thanks to an advertising deal between News Corp. and Google struck in 2006), in 2010 and then it will be cut off. Under the terms of the agreement, MySpace will receive $300 million over the next year if the network makes certain search page view requirements.
When the deal is over, MySpace will have a social network that costs half a billion dollars a year to run. But as shown above, page views are decreasing and with Google’s yearly infusions of money gone there is a strong likelihood that the News Corp. subsidiary will be unprofitable a year from now, even with all of these cuts. It appears that Van Natta is using the layoffs to trim expenses but we estimate 720 total worldwide layoffs would only amount to about $7 to 8 million in monthly expenses (assuming $11K per head, including payroll, benefits and overhead).
MySpace could lay off its entire staff and still not be profitable.
INDIA
ARGENTINA
SPAIN
CANADA
FRANCE
SWEDEN
ITALY
MEXICO
RUSSIA
BRAZIL
Hi Leena,
It seems like MySpace needs to make some big changes to attract more visitors but not by firing its employees.
One thing in my opinion what MySpace needs to do is change its interface a bit and make it more real-time update friendly and get rid of the spamming fake profiles.
Thanks for the great post.
Mani Raj
Havoc Marketing
The biggest reason i and most of my friends stopped using Myspace was the fake profiles!
The biggest reason i and all of my friends stopped using MySpace and Orkut was the fake profiles. I’m a brasilian and choose Facebook.
Surely that makes zero business sense or maybe it just makes no sense.
I would have thought that you increase your staff in the locations you are weak rather than slash, burn and retreat.
Welp, that about wraps it up for MySpace.
Without wanting to sound like an ass, decimation would mean they were removing 10% of the staff, not 66%.
Decimation means that you get something down to 10% of what it used to be (etymologically, decime = 1/10). In other words, it’s supposed to be a 90% slash. In even other words, of every then guys, there’s only one that remains. Got it?
I don’t know what dictionary you’re reading, but the meaning as stated by the dictionary is “to select by lot and kill every tenth person of”. That means it would be cut to 90% by 10%, not cut to 10% by 90%.
Wow! That’s kinda bad for Myspace….I don’t really like facebook however…
Does it matter if you like FB or not? At some point it will reach a breaking point where all your friends will be on FB and you will have no choice… and the thing is FB is not a fad like all the haters in here think…
Canada is gone already….
http://profecti...dian-operations
Crackheads can’t remember more than five minutes ago.
The same spike/peak/plateau happen to:
FireFly
6 Degrees
Friendster
…now Myspace
See a pattern here? Facebook is next.
look at you all smart.. people like you serious have no idea what they are talking about.. Facebook is here to stay.. see the real sign of a company is how many people over 30 use it.. that is the generation of people who are more loyal and usually too busy to switch to another company.. and most of these people are on facebook.. it is the under 30 that tend to be fickle.. like it or not facebook is hear to stay…
Hmm. according to comscore, both myspace and facebook have nearly identical audience numbers for 30+ crowd. and while I can’t quote stats on this, aren’t people over 30 the most stagnant users and contribute to the lowest online usage?
Facebook is next — mainly because they continue to smugly ignore what their users say
should we expect anything more from ceo with so much experience in cutting and running.. playlist.com.. anyone
Hang on a sec. Where did you get the $500 million dollar cost figure for MySpace??
I very much doubt it costs that much to run.
Increasing staff in weak locations would be a silly move. They need to get their product right before they increase staff numbers in any location.
IMO they should attempt to silo off all the outrageous, heavy customisations by users into a ‘playground’ tab and adopt a facebook style clean user interface. FB clearly proved ages ago a clean UX is how we want it. If they want to stick with their messy UX then invest in Asia, they love that style of UX there. Look at myspace japan.
Another question is why does an internet company need so much local staff in the first place.
Seems like its not only MySpace that is stagnating. IMHO, all those users in Canada, France, Mexico, Italy, Spain and Brazil need to abandon MySpace and move over to Facebook
They need that money to pay Tom to sit on his ass….
http://mashable...space-tom-deal/
could see this coming, but Facebook better lookout for Google profiles in about 2-3 years
Brazil’s office was operating in blue.
The graphs are a perfect example of great performance so far.
And yet, the new CEO just threw the baby with the water.
Smart move, Van Wilder!
MySpace should do some internal analysis on which countries they can monetize better–like English speaking countries (US, UK, Australia, Canada) and the main European countries (Germany, France, Spain, Italy, Netherlands) and cut everything else out. Focus on those who have credit cards and keep their advertisers happy.
All I can say is that MySpace management is ignorant. Who in their right mind would be closing Brazil or Argentina? It almost sounds like the Bush administration and their indifference to international markets!
In the long run this will come back and bite them on the butt. MySpace will be a English-language niche player.
MySpace is dead and gone. I don’t think there’s any going back now.
if that’s the case, then are all the other sites out there with less than 120 million worldwide users also dead and irrelevant?
Layoffs cant help them. They have to come wth some innovative idea.
Canada had 15,000,000 Uniques at Facebook? Maybe I’m failing to understand the definition of “Unique Visitor” – but that’s 50% of the countries population…
Sad for MySpace. MySpace is launching a new open source website performance tool. TechCrunch should consider writing about that too.
Your pie chart doesn’t even label what service those numbers are for. Take more than 15 min to write an article, it’ll be ok, the news will still be there.
Do you have statistics of Orkut which is the most popular one in India and Brazil?
Orkut is a trash. I’m braziliam. Orkut have spammers, fake profiles and stupid people.
Orkut is by far the most popular in Brazil, I think it’s the most popular in India too.
I think Orkut is by far the best User Interface of all, I just don’t like the new ajax loading that it was created for better performance and it doesn’t delivery any performance…
Cool. Facebook is the power social network.
test {seesmic_video:{”url_thumbnail”:{”value”:”http://t.seesmic.com/thumbnail/NpY6kJkQcY_th1.jpg”}”title”:{”value”:”test ”}”videoUri”:{”value”:”http://www.seesmic.com/video/erYjY8X51x”}}}