MySpace Australia to close doors

16 May 2011

by Lars Brandle

MySpace executives Rebekah Horne and Nick Love are joining the exodus as the social networking company finally shuts the doors of its Australian company, TMN can confirm.

The closure of the Australian office had been widely expected, after the U.S.-based MySpace Inc signalled in January its Sydney-based affiliate would outsource advertising sales and content management and scale-down its workforce. Since then, the Australian company has continued to function with a pared-down workforce.

The Australian outpost of MySpace was one of the biggest outside the U.S. and in January counted about 30 staff. But as early as this Friday – sources say – the staff will have all been let go. Among those who will be looking for a job is MySpace Australia managing director Love, who declined to comment for this article.

A U.K.-based spokesperson for the company couldn’t give a precise date, but confirmed the operation would be shuttered by the end of the month.

Also leaving the company will be high-flying Australian-born executive Rebekah Horne, who splits here time between the U.S. and Australia in her position as Managing Director and Senior VP of International. Horne, however, will stay on with the group a while longer than her Sydney-based colleagues.

The staff of MySpace Australia have paid the price for a once-popular global company, which has been left in the wake of social networking beasts Facebook and Twitter.

When Rupert Murdoch’s News Corp bought MySpace in 2005, it carried a US$580 million pricetag. Though that figure pales in comparison to the US$8.5 billion Microsoft has recently agreed to pay for Skype, Murdoch paid a princely sum at the time for what was essentially a promising platform populated by artists and teens.

The fortunes of MySpace have swung wildly. For a moment in 2007, MySpace was valued at $12 billion when News Corp attempted to merge it with Yahoo.

Now, Murdoch reportedly wants just US$100 million. MySpace has been a financial drag on News Corp, which recently reported a 6% drop in revenue to $8.26 billion, well-down on analysts’ forecasts of $8.45 billion.

As the News Corp began whipping MySpace into shape for a sale, MySpace Inc. CEO Mike Jones in January declared a group-wide cull, which would see roughly half the global headcount lose their jobs. Just two months earlier, MySpace had re-skinned its Web presence in what was its biggest reboot to date, and embarked on a charm-offensive to draw back users who had flocked other, less clunky services.

As part of the reshaped MySpace, the Australian entity will shift toward a strategic local partnership to manage advertising sales and content. Details of the Australian partnership will be announced in due course, according to a spokesman, and a transition team will assist in the hand-over. Horne will play a role in the transition.

For Australian users of the MySpace platform, the blood-letting within the halls of MySpace shouldn’t spill on to its platform. “If you were using MySpace,” a source says, “you shouldn’t notice anything different.”