It’s a drag when you’re no longer #1.
MySpace, the social network owned by , said it will cut 30 percent of its staff to lower costs as it struggles to stay popular in the face of rising competition.
MySpace will be left with about 1,000 employees, it said in a statement released on Tuesday. The company declined to say how many people work at the service, but the percentage suggests that about 400 people will lose their jobs.
The cuts, which were presaged in several blog reports in recent weeks, are the biggest move so far by new management at the social network and an attempt, it said, to return the service to a “start-up culture.”
“Simply put, our staffing levels were bloated and hindered by our ability to be an efficient and nimble team-oriented company,” MySpace’s new chief executive, Owen Van Natta, said in the statement.
“I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace.”
First of all, why in the world does a social networking website need to employee 1,400 people? And what do those people do? Seems excessive to me. That seems to be a general problem with Web 2.0 sites. Get most of your money from venture capitalists firms. Spend it all so you can go ask for more. Tell the VC’s that you’re business plan is on a slow ramp up, and that you’ll be profitable “soon”.
I think Facebook will be next, unless they find some real way to generate revenue. They won’t be able to get it from users – free is free and I doubt many will pay to keep their profile. It will forever be subsidized until Mr. Deep Pockets gets tired of waiting for the big pay day.
You can’t just pepper a page with a bunch of ads and pop ups and expect it to last. Another business model will have to come along if these things will survive for decades to come.