MySpace sharpens the axe

Michael Carroll
06 Jan 2011
00:00
News
Daily News

In a tale of conflicting fortunes, social networking site MySpace is preparing to lay off thousands of workers while rival Facebook could delay an IPO after receiving fresh funding.

 

MySpace is mulling additional layoffs that could cut its 1,100 staff by 33% to 50% as part of a major cost cutting exercise.

 

The firm could implement the redundancies within a month, after a previous round of layoffs in 2010 that cut the workforce by 30% failed to bear fruit, WSJ.com reports citing internal sources.

 

News Corp-owned MySpace has struggled to compete with the soaring popularity of Facebook despite re-jigging the site to focus on its strong portfolio of media content. Its problems were highlighted last month by a renewed search deal with Google, which is reportedly worth far less than the pair’s original three year agreement.

 

The continuing problems could see the site sold, the Journal said, though no deal is in the cards at present.

 

In contrast, Facebook is flying high, with additional funding of $500 million agreed with Goldman Sachs and other investors this week giving it flexibility over when to go public, and raising the firm’s valuation to over $50 billion.

 

Fresh rumors of an imminent IPO were sparked by a stock-split Facebook conducted in October to bring its share price back in-line with its peers, despite board member Peter Thiel stating the firm wouldn’t consider going public before late 2012.

 

Silicon Valley startups are today far less keen on a quick IPO than a decade ago, the Journal notes in a separate report.

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