Kara Swisher

Recent Posts by Kara Swisher

After Even More Turmoil, Can the "Hot Mess" at MySpace Be Saved?

Last week, someone who has been at MySpace for a while told me what it’s like working inside the social networking company, which has gone from supernova to also-ran in the course of a few years.

Reflecting on the downward spiral, which MySpace owner News Corp. (NWS) has been trying to slow over the last year, and how hard it has been to do a turnaround of any kind, the exec could not shake the idea that it could still be revived.

“MySpace is kind of a hot mess,” said the exec, referring to its still-large audience and well-known brand. “It’s both impossible to save and hard to give up on.”

Unfortunately for all those involved, that mess got even messier yesterday after the ousting of CEO Owen Van Natta by News Corp. Chief Digital Officer Jon Miller.

While News Corp. tried to paint the departure as more mutual in its official statement, it was most definitely not, as infighting among top execs finally came to a head today.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

Escalating tensions over strategy going forward had grown untenable between Miller and Van Natta, as well as among and between Van Natta and his top two execs, COO Mike Jones and Chief Product Officer Jason Hirschhorn.

(Pictured from left to right above are Van Natta, Jones and Hirschhorn.)

Sources said relations had gotten so bad that Hirschhorn had told Van Natta recently that he was planning to resign by June.

It was a threat that moved well beyond well-known gripes the former media exec had aired to many outside the company over the last year about how MySpace was in much worse shape MySpace than he thought, and that reflects weariness from the weekly commute between his home in New York and the company’s Los Angeles HQ.

And after a recent blog post that claimed Hirschhorn was the one leaving, relations became even frostier, sources said.

The relationship between Miller and Van Natta had also become badly frayed, several sources noted, mostly over the pace of change and the level of control Van Natta had over MySpace.

“There were serious disagreements and something had to give,” said one person close to the situation.

After firing Van Natta in an afternoon meeting yesterday in what several people described as a “termination without cause,” Miller (pictured here with Van Natta behind him) appointed Jones and Hirschhorn co-presidents of MySpace.

It was a dramatic shift from only nine months ago.

With the backing of News Corp. CEO Rupert Murdoch, Miller hired Van Natta last April, after jettisoning co-founder and CEO Chris DeWolfe.

But despite his CEO title, the former Facebook and Amazon (AMZN) exec didn’t get to select the two top executives beneath him.

Both Jones and Hirschhorn were hired by Miller directly–also with Murdoch’s involvement and approval.

The idea at the time of assembling this troika was that three heads are better than one, especially in dealing with the technological, administrative and business hairball that MySpace had become over the years.

As it turned out, three heads came with three brains and three different ideas of what MySpace needed to do to fix itself.

While the work to clean up the company, make cuts and attract new talent proceeded, it seems as if not enough progress was made on the what-next part of the equation, as various strategies were considered.

That led to an increasing number of clashes as pressure began to mount to do something, even as rival Facebook’s growth skyrocketed.

While Van Natta and the others distilled the idea of making MySpace the place where consumers and artists store and keep track of their entertainment content online, using a series of “super tools” to move them all over the Web, the lack of concrete changes even began to irk Murdoch.

In News Corp.’s earnings call last week, in fact, Murdoch said about MySpace, despite recent encouraging signs of stabilization: “It’s not yet where we want it.”

Uh-oh, that might have been a clue to watch for big changes!

In addition, as MediaMemo’s Peter Kafka noted, News Corp. disclosed that MySpace and the rest of its digital portfolio were coming up short on their end of a $900 million, three-year search deal with Google (GOOG), meaning that News Corp. would receive around $100 million less than originally anticipated.

This was due to changes made to the site’s design, which cut down on some page views that the old site created to show higher traffic.

And, said sources, any new search deal with Google or, perhaps, Microsoft (MSFT) is not expected to be stellar.

“MySpace will get paid what it is worth,” said the source about search fees. “But the days of big payouts are over.”

The real problem, of course, is that MySpace’s audience has been going elsewhere, particularly Facebook, and will continue to do so until a bold new direction is set.

Many in the industry do not think that is even possible and that News Corp. shouldn’t even own MySpace anymore.

There is also a good argument that the company should have, and could have, sold the asset several years ago, either to Yahoo (YHOO) during its takeover fight with Microsoft or to another bidder when the company was riding high.

Now, News Corp.–which is dealing with many other vexing digital issues, including a pitched battle over paid content–is stuck trying to fix a distressed asset that became that way by allowing the old regime to run it in a less than rigorous manner.

And despite all the Band-Aids applied so far, reviving MySpace will take a lot of more arduous work from Jones and Hirschhorn, neither of whom has helmed as big an organization, despite recent layoffs.

In addition, the co-presidents must get along well, and power-sharing arrangements are always tricky to pull off.

So, until Miller, Jones and Hirschhorn figure it out–or not!–and, in honor of MySpace’s music meme, here is Cobra Starship’s “Hot Mess” video:


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