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Thursday, February 11, 2010

MySpace CEO Owen Van Natta Steps Down

USA Today

SAN FRANCISCO — Less than a year after he bolted Facebook for its social-networking rival, Owen Van Natta, 40, is out as MySpace CEO.

The abrupt announcement was made late Wednesday. Van Natta will be replaced immediately by newly-promoted co-presidents Mike Jones and Jason Hirschhorn. (Last year, Van Natta displaced MySpace co-founder Chris DeWolfe.)

"Owen took on an incredible challenge in working to refocus and revitalize MySpace, and the business has shown very positive signs recently as a result of his dedicated work," Jon Miller, News Corp.'s Chairman and CEO of Digital Media, which owns MySpace, said in a statement. "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. I want to thank Owen for all of his efforts."

In a terse comment, Van Natta called MySpace "an incredibly unique place" where he and his management team "made real gains in terms of product focus and user experience. I'm proud of the work we've all accomplished together and look forward to watching its continued growth."

But for many analysts, such as eMarketer's Debra Aho Williamson, MySpace was a mess, clearly eviscerated by the vastly popular Facebook. "The last thing MySpace needs is any sign of management instability whatsoever," she said. "For months now we've heard about the company's plan to refocus on its historic roots in music and entertainment. But the turnaround has been painfully slow, and this shakeup will only reinforce the perception that MySpace can't be fixed."

Once the undisputed king of social networking, MySpace is scrambling to reinvent itself as a scaled-down Web portal for music and entertainment news.

A fresh management team, led by Van Natta,a former executive at Facebook, had snapped up music services iLike and iMeem in recent months, spawning rumors that MySpace might develop a subscription music service to complement its free, ad-supported MySpace Music, a joint venture with four major music labels. The company has also ramped up entertainment-related news feeds via Twitter.

For those reasons and others, MySpace, nestled near the entertainment capital of Hollywood, thought it could survive — even thrive — as a repository for all things music, Avatar and New Moon for the under-40 crowd.

But is the battered company still relevant? Williamson and others openly wonder. Facebook, closing in on 400 million users, is nearly four times the size of MySpace's installed base.

Marketers, meanwhile, are funneling their dollars into Facebook as the network continues to rack up big membership and traffic numbers. The site clocked 97.4 million unique visitors in the U.S. — about half of the USA's online audience, says market researcher Comscore.

And eMarketer estimates ad spending on MySpace will fall 21% this year, to $385 million, worldwide. It expects Facebook to rake in $605 million in ads worldwide this year, up 39% from 2009. If not for a deal with Google, MySpace's revenue would be lower, Williamson says.

"MySpace surfaced when everyone had (an anonymous) handle," says Karen Appleton, head of marketing and business development at Box.net. "That has flipped now. Almost everyone identifies themselves by their real name on Facebook and Twitter."

Underscoring MySpace's diminished status, it was lampooned in a Saturday Night Live bit in late January. In it, weekend anchor Seth Myersreferred to the site as an "abandoned amusement park."

Facebook had no comment on Van Natta's departure.