Yesterday's resignation of MySpace CEO Owen Van Natta could push an already troubled company into further disarray.
News Corp., MySpace's parent company, announced last night that Van Natta was stepping down as the company's CEO after a little less than 10 months in the post. Van Natta has already been replaced by co-presidents Mike Jones and Jason Hirschhorn, previously MySpace's COO and chief product officer respectively.
"Owen took on an incredible challenge in working to refocus and revitalise MySpace, and the business has shown very positive signs recently as a result of his dedicated work," said Jon Miller, News Corp.'s Chairman and CEO of Digital Media. "However, in talking to Owen about his priorities both personally and professionally going forward, we both agreed that it was best for him to step down at this time."
The pioneering social networking company has been on a difficult slide in recent years as rival Facebook came on to significantly eclipse it in terms of market and mind share. In fact,Facebook last year passed MySpace in both US and worldwide user counts.
Van Natta last spring had replaced Chris DeWolfe as the company's CEO and immediately sought to return MySpace to its former glory. But a rocky economy and Facebook's continued strength forcedMySpace last summer to cut its US staff by 30% and its offshore staff by two-thirds.
The loss of a new CEO will likely leave MySpace "rudderless," at least for at least the short-term, said Rob Enderle, an analyst with the Enderle Group.
Enderle suggested that it may be easier for News Corp. to sell MySpace than try to turn that ship around.
Augie Ray, a senior analyst at Forrester Research, said it will be very difficult for MySpace to regain any of its lost momentum without significant investment in both site innovation and promotion.
"It's a little hard to see this as a good thing -- for MySpace to have a president leave so quickly," added Ray. "I think it would be very difficult for [MySpace] at this point to regain consumer adoption given the trends that are moving around them, particularly with Facebook and Twitter, and, depending on how it goes, Google Buzz."
Last summer, News Corp. CEO Rupert Murdoch told the Wall Street Journal, also a News Corp. property, that the company planned to reposition MySpace as more of a music and entertainment portal.
That, Ray noted, may not be a bad idea.
"I think that the social world is very big and very diverse," he said. "Do I think they'll be a global social network for the masses? No. I don't think they can catch the competition unless there's significant investment. But could they be a vibrant network around, say, entertainment? Sure? I think they have a very real social play. It's just going to be a different social player than we thought of them two years ago and as we think of Facebook today."
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