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Owen Van Natta Out at MySpace

Peter Kafka — Thu, 11 Feb 2010 01:45:12 +0000

Owen Van Natta, the prominent Internet executive brought in to overhaul MySpace, has left after less than a year.

News Corp. (NWS), which owns the social network, has replaced the CEO with his former lieutenants, Mike Jones and Jason Hirschhorn, who have been named co-presidents.

It is Van Natta’s second consecutive short-tenured job. Prior to MySpace, he ran music start-up Project Playlist, where he stayed for less than six months. Van Natta built his reputation at Facebook and Amazon (AMZN).

A press release spins this as a mutual decision between Van Natta and Jon Miller, the News Corp. executive who joined the company less than a year ago himself to run digital operations. But that’s going to be a difficult story to sell.

For starters, it’s clear that attempts to turn the social network around are taking much longer than expected, as News Corp. CEO Rupert Murdoch acknowledged last week during the company’s earnings call.

Last fall, News Corp. disclosed that MySpace and the rest of the company’s digital portfolio were coming up short on their end of a $900 million, three-year search deal with Google (GOOG), which meant News Corp. would receive around $100 million less than originally anticipated.

That may be in part because of changes the new MySpace leadership made to the site’s design, which cut down on some of the page views the old site created. But the shortfall was primarily because the MySpace audience has been migrating to other sites, particularly Facebook, for some time.

MySpace executives have been overhauling the site, mainly under the hood, and rolling out a series of incremental changes in recent weeks. These changes aren’t supposed to win back Facebook users–the company has declared that it’s no longer trying to compete with that site as a social network anymore–but are designed to help it hang on to existing users and establish itself as some sort of entertainment hub.

A tough task under any circumstance. But tensions in the corporate suite didn’t make it easier. Miller hired Van Natta, but the CEO didn’t bring in the two executives directly beneath him; both Jones and Hirschhorn were hired by Miller (along with Murdoch, who signed off on both men).

People who have talked to Van Natta say he has been relatively public about his frustrations at the job in recent weeks. Describing Jones and Hirschhorn as happy campers would be a stretch, too.

But whatever finally prompted the move seems to have come relatively quickly: The MySpace and News Corp. insiders I’ve talked to so far seem taken aback by Van Natta’s departure.

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

Here is the official press release from News Corp.:

Owen Van Natta Steps Down as MySpace CEO; ?Mike Jones and Jason Hirschhorn Elevated to Co-Presidents

Los Angeles, CA, February 10, 2010–News Corporation today announced that Owen Van Natta will step down from his position as MySpace CEO, effective immediately. Mr. Van Natta will be replaced by newly-elevated co-Presidents Mike Jones and Jason Hirschhorn, who will each report to Jon Miller, Chairman and CEO of Digital Media for News Corporation. All three executives joined MySpace in April 2009, with Mr. Jones and Mr. Hirschhorn previously serving as Chief Operating Officer and Chief Product Officer, respectively.

“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,” said Jon Miller, News Corporation’s Chairman and CEO of Digital Media. “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.”

Mr. Miller continued, “Mike and Jason have demonstrated true leadership in their operational and product guidance, respectively, and I have the utmost confidence in both of them to lead MySpace into its next chapter.”

In a joint statement, Mr. Jones and Mr. Hirschhorn noted:

“We joined MySpace last April with very a specific set of goals in mind, and are anxious to continue working together to make those goals a reality. This business is now pointed in the right direction, and we have a great team of employees that will continue to push MySpace closer to its potential as the place where people go to be discovered and to discover great content.”

Mr. Van Natta commented:

“MySpace is an incredibly unique place and we’ve 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.”

Prior to his role as MySpace COO, Mr. Jones founded and operated several online businesses, including Userplane, a leading provider of tools for online communities such as MySpace. Userplane was acquired in 2006 by AOL, where Jones subsequently served as a senior vice president and focused on social media monetization and also pioneered the distribution of widgets and other technology to Web publishers. He also was founder and CEO of Tsavo Media, an online content and search network developing next-generation publishing platforms and technology services.

Since joining MySpace, Mr. Hirschhorn oversaw all aspects of product development, and previously has led both start-up and established online businesses. He was president of Sling Media, Inc.’s Entertainment Group, which created consumer-driven applications and services for the Slingbox device, and was chief digital officer at MTV Networks, where he oversaw the company’s digital media businesses, products and strategies. Hirschhorn joined MTV Networks following the acquisition of his company, Mischief New Media, which provided interactive services to the entertainment industry.

Google Makes AOL's Turnaround Task Even Harder

Peter Kafka — Fri, 13 Nov 2009 14:43:43 +0000

Little by little, AOL is offering investors more and more details about what the company will look like after it spins off from Time Warner (TWX).

The problem: The more AOL discloses, the less attractive the company looks.

The most recent nuggets come from a preliminary prospectus Time Warner filed with the Securities and Exchange Commission yesterday. Some, but not all, of this has broken out in previous filings or earnings announcements. In any case, it helps to see it all in one place.

The big picture: AOL’s subscription service, which accounts for the “vast majority” of the company’s operating income, is withering away. But advertising revenue, which was supposed to replace that money, has been declining for nearly two years (see tables below; click to enlarge):

And here’s a closer look at the ad business and its recent performance:

The good news for AOL is that some of this is the result of self-inflicted wounds, and it’s possible to heal some of them. The company’s previous regime seemed to go out of its way to mismanage and dismantle the sales force, for example, and if new CEO Tim Armstrong can rebuild that team, he can make a bit of headway.

The flip side is that some of AOL’s woes may be well beyond Armstrong’s control. Money from a Google (GOOG) search deal, which provided a third of AOL’s $2.1 billion in ad revenue last year–and had been increasing up until this year–is now dropping off, too.

Google dollars fell by $42 million in the most recent quarter, representing more than half the $75 million drop in ad dollars from its AOL Media unit. And Google income fell by $90 million in the last nine months, representing about 40 percent of $197 million decline in that period.

AOL says some of the Google decline stems from its declining subscriber base, which brought down search query volume. The rest is due to lower revenue per search query–that is, Google has changed its algorithm in way that ends up punishing AOL. But Armstrong can’t do a whole lot about either of these variables.

He can try extracting more money from Google, whose search deal expires at the end of next year, or from Microsoft (MSFT), which is trying to gain share any way it can.

Earlier this year, Armstrong turned down a new deal from Google and now says he’ll deal with search after he gets other things in place. But the longer he waits, the less leverage he may have.

AOL shareholders will be paying Armstrong well to figure this out, though. His three-year deal pays him a base of $1 million a year, plus annual cash bonuses of up to $4 million. In addition, he’s getting $20 million worth of stock grants to make up for Google shares he left on the table when he resigned from his old employer. And he’ll get stock options worth as much as 1.5 percent of the company once the spinoff is complete.

That said, AOL will also be paying former AOL CEO Randy Falco, who got tossed out in March. Falco will continue to pull down a $1 million salary through 2010–and he’ll get $7.5 million in bonuses through then as well. Former AOL COO Ron Grant, meanwhile, will earn $750,000 a year, plus another $3.3 million in bonuses.

Yahoo's Bartz: Microsoft Deal Was "Very Clever"

Peter Kafka — Tue, 22 Sep 2009 17:35:15 +0000

Say this about Yahoo CEO Carol Bartz: She promised to answer any and all questions at a New York press conference today, and she delivered! The event, which was meant to highlight Yahoo’s new $100 million marketing campaign, went on for a good hour, and the Q&A covered a wide variety of topics (and a PG-rated F-bomb).

And when that finished, Bartz agreed to answer yet more questions. Video is below, but here’s a synopsis:

Should press and investors really compare Yahoo (YHOO) to Time Warner’s (TWX) AOL unit? “We aspire higher than that.”
Bartz explains and defends her Microsoft (MSFT) search deal yet again. Key point: “I never wanted a big upfront payment,” she says. “What I got was revenue, with my expenses covered. I think that’s actually very clever…cash doesn’t help me. But revenue helps me. Revenue without expenses really helps me.”
Bartz says major Yahoo investors like Gordon Crawford support her tactics and strategy: “They’re fine. I meet with them a lot.”
Yahoo is interested in M&A, but “nothing on an epic scale,” says Bartz. “Buying interesting sites and content so we can pull in users or smart people, always a great option for us.” Giant joint merger combinations? “That’s really hard. Small and medium-sized opportunities are really what make sense for us.”

[ See post to watch video ]

D7 Interview: Jon Miller and Owen Van Natta Say MySpace Needs to Innovate

Peter Kafka — Wed, 27 May 2009 23:49:44 +0000

A couple of years ago, MySpace was the hottest thing on the Web. But that was a couple of years ago. Now the social network has gone cold: It is losing audience to Facebook and other sites and may well lose a very lucrative search deal from Google (GOOG). Fixing MySpace is the chief priority of Jon Miller, the former AOL boss who was brought on as News Corp.’s (NWS) chief digital officer in March. About a month after that, Miller brought on former Facebook executive Owen Van Natta and a new management team to run MySpace, displacing the site’s founders. Time for Van Natta to tell us just how he intends to save what was once one of the most important sites on the Web. And time for Miller to explain the digital future for the rest of News Corp.–which happens to own the All Things Digital Web site and conference.

Video Highlights

[ See post to watch video ]

Live Blog

Walt whips out his poll data again. Points out that Facebook and MySpace are neck-and-neck in overall use. But 61 percent of people say they are using MySpace less often than they used to. “Less usage would be bad,” notes Owen. Back to the poll: Why did people use MySpace less? Nearly one third–30 percent–replied: “I got bored.” Owen thanks Walt for the free market research.
Kara: What happened at MySpace? How did it come to this? Owen: “If you don’t continue to innovate and give people what they want next…people are going to shift interests elsewhere. They’re going to continue to evolve their usage of the Web. The thing about MySpace is, there’s a lot that’s unique about MySpace. We need to seize on that.”
Walt: Gimme some examples of how MySpace is different/unique. Owen: It’s more open, people share more information more freely, a bigger canvas, the ability to create pages that I don’t like the look of but people do.
Kara: Jon Miller, tell me about the parking story at AOL. Jon: Did I tell you about this? Ok. A month after I go to AOL, following the merger with Time Warner, I went to visit people. Visited a division of Time Warner and senior staff. Hostile vibe. I tried to defuse it with parable about what happens when your car gets towed in New York, and how the people who work in the car lot didn’t actually tow your car, so please don’t yell at them.
Kara: You were at Velocity, investing with Ross Levinsohn [who helped News Corp. with the original MySpace deal]. Why did you leave? Jon: I thought there was a big opportunity. Owen: “Jon told me it was so he could get comped at D.”
Walt: Can you make this work with just advertising? Jon: It’s the central question of our time in the media right now. Free vs. paid. Obviously consumers want everything to be free. Kara: “You’re a Communist.” Jon: Obviously that doesn’t work. “It’s pretty clear that there has to be some recognition of value.” And we’re starting to see that take shape. And there has to be recognition that different things have different value. If it’s all free or all ad-supported, it won’t work. Ask Jeff Zucker about that–he loves the cable business. The real question is how much, and who’s going to pay, and is it going to be bundled?
The gang draws parallels between the cable business (content plus access) and the old AOL (content plus access). Could that work somewhere else?
Jon: The $10 wholesale price for a CD isn’t coming back. Maybe it’s $6. Maybe it’s $8. Those changes put big pressure on that business. We’re not just going to come out of the recession and see everyone spend the same money they used to spend.

Kara: Back to MySpace. What happened? You both were up for Jon’s job, correct? [Pause]. Jon: “I just interviewed by myself.”
Owen: MySpace is a really big site. Of course I’d want that job. I like building things. I built houses in high school in Palo Alto. At MySpace, there’s such opportunity to build.
Kara: You were at Facebook, left Facebook, went surfing, then Playlist, then this. Is there a connection?
Owen: I’ve always liked social networking. Was at a start-up that got bought by Amazon (AMZN). Facebook vs. MySpace: Fundamentally different. MySpace focused on a platform that allows people to be super-creative. Music is a big thing on MySpace. 550,000 people are friends with Green Day. Consuming their albums. We sponsored a secret show. Jon went and scared the band.
Walt: My kids are musicians and have pages on MySpace. I asked them, and they say they never go there, except to promote the band. They’re both on Facebook and they both Twitter. Is MySpace too closely linked to music, too narrowly branded? Or is that a big advantage?
Music’s a huge advantage. We have joint ventures with the major labels. But video is a big advantage, too. My job is to bring teams together to figure out what people are doing, and give them the right tools, and if they’re not using it, figure out why or stop doing it.
Jon: People only change their behavior for a few reasons. One is music. I also think what’s interesting about the Web is you can nail something for a single group, and it can broaden out. For MySpace that was music, and for Facebook that was college.
Walt: People think all these social networks are for kids. But do you want to aim at a single age group?
Owen: We have 130 million uniques. But we need to core down and heavy up where you have traction. And we need to focus on younger demographic.
Is Facebook a competitor? Jon: Yes. But so is everything else. So is Twitter. Walt: Seems like these things naturally evolve from one site to another. How can you recapture that excitement from a few years ago? Owen: We already have 130 million people coming to the site every day. If we can excite them with new products, that can happen.

Owen refuses to disclose super-secret disruption plan? Not saying, even though Kara threatens to touch Owen’s knee, Bartz-style.
Jon sings the praises of innovation and liberating employees to let them be more entrepreneurial so they can iterate. There are some recurring buzzwords here.
Walt wants to know if there are ways to monetize MySpace that haven’t been tried. Jon: In advertising, it means a lot of things. Premium, performance, search, etc. We’ll have things like targeting, and micropayments, and we’ll be able to introduce subscriptions for some products.
Kara: What’s up with the Google (GOOG) deal? Owen: It’s important, but it’s not the majority of our revenue. Also, it’s half over. So we need to be heads-down focused on our own site. With these long-term deals, you need to figure out how to make them work. This is no different. The most important thing is how is Google going to feel at the end of this partnership?
Jon: When it comes time to negotiate, one thing to think about is whether we could do an overall deal with Google that wraps in more News Corp. properties.
Q&A: Sorry, missed the first question. The second question is yet another one from Mark Glaser, who is popping off at every one of these. He wants to know why MySpace is so loud and garish.

Owen: I don’t like a lot of the loud stuff either, so we need to work on personalization.
Kara: What about Facebook’s fascist approach, where it works the same for everyone?
Owen: We are going to look different and feel different than everyone else, and that’s good.
Jon: The tendency when you fall behind in product areas is to think that you have to catch up by checking boxes. I think that’s wrong. You should leapfrog and focus on emerging behaviors, and go for the big moves. Question: Lessons from AOL? Jon: Yes. Everything I did I should have done faster and sooner.
Ethan Smith from The Wall Street Journal wants to know about music and MySpace. I don’t quite follow it. Oh, it’s about labels complaining about that they’re not making enough money from MySpace. Edgar Bronfman Jr. is the most vocal here. Owen: I’ve talked to Edgar and it’s a complex partnership, and we’re figuring things out together, just like Google.
Quentin Hardy from Forbes wants to know about organizational behavior theory. Jon: Keep market-facing. That’s the No. 1 thing. It must also be metrics-driven. You have to know how your stuff is being consumed, by whom and how they’re doing it. Once you start doing that, you’ve got a shot. You also have to make sure you’re looking at the right metrics. Page views, for instance, may be the wrong metric, if generating page views upsets your customers.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as we were able. It was not intended as a transcript and should not be interpreted as one.

Shake-up at Sony

John Paczkowski — Fri, 27 Feb 2009 20:20:30 +0000

[ See post to watch video ]

Microsoft CFO: With or Without YHOO

John Paczkowski — Fri, 27 Feb 2009 13:15:56 +0000

Microsoft is still interested in a search deal with Yahoo (YHOO), but for now it’s assuming one’s not in the cards. That’s the word from Microsoft CFO Chris Liddell, who, in remarks at a Goldman Sachs conference in San Francisco Thursday, said Yahoo is not a “silver bullet” solution for the problems with its search business.

“Yahoo doesn’t have the magic solution,” Liddell said. “No one should think it will transform the industry….Putting the two organizations together would be a useful step, but it won’t be a panacea….We have to have a plan that excludes Yahoo, we can’t be dependent on that. Even though we’ve suggested it would be great to get together, we don’t work on the basis that’s going to happen. If it does that’s great, but if it doesn’t, that’s fine too.”

Liddell’s remarks came a day after soon-to-be-former Yahoo CFO Blake Jorgensen said the company had not ruled out the idea of a search deal with Microsoft (MSFT).

Yahoo CFO's Newest Search Deal: Search for a New Job

John Paczkowski — Thu, 26 Feb 2009 19:00:39 +0000

[ See post to watch video ]

Yahoo CFO's Newest Search Deal: Search for a New Job

John Paczkowski — Thu, 26 Feb 2009 19:00:39 +0000

[ See post to watch video ]

Yahoo CFO Blake Jorgensen Out as Bartz Starts Reorg

Peter Kafka — Thu, 26 Feb 2009 17:52:28 +0000

Time to start “getting our house in order,” Yahoo CEO Carol Bartz declared today.

One of the first steps: Sweeping out CFO Blake Jorgensen.

Here’s the two-sentence update Yahoo filed with the SEC this morning explaining the move:

“On February 26, 2009, Yahoo! Inc. (the “Company”) announced that Blake Jorgensen, Chief Financial Officer of the Company, will be leaving the Company. The Company has initiated a search for a new Chief Financial Officer. Mr. Jorgensen will remain with the Company as its Chief Financial Officer through a transition period.”

Jorgensen, you may recall, was the Yahoo (YHOO) executive who was signaling the company’s interest in a Microsoft (MSFT) search deal just yesterday.

Bartz Blogs Reorg!: The Entire Memo to Yahoo Employees

Kara Swisher — Thu, 26 Feb 2009 17:28:26 +0000

Yahoo CEO Carol Bartz declared reorg today on the company’s corporate blog, Yodel Anecdotal.

Here is her entire memo:

Getting our house in order

Posted February 26th, 2009 at 9:16 am by Carol Bartz, CEO

A month and a half in the saddle and today I have the perfect excuse to get blogging.

I’ve been on a whirlwind tour for the last six weeks, talking with everybody from executive leaders to the guys who configured my laptop. I’ve been in student mode, slowly getting smarter about what makes this place tick. And most recently, I’ve been gathering information on what it’s going to take to get Yahoo! to a great place as an organization–and one that brings you killer products.

People here have impressed the hell out of me. They’re smart, dedicated, passionate, driven, and really nice. There’s so much great energy and frankly lots of optimism. But there’s also plenty that has bogged this company down. For starters, you’d be amazed at how complicated some things are here.

So today I’m rolling out a new management structure that I believe will make Yahoo! a lot faster on its feet. For us working at Yahoo!, it means everything gets simpler. We’ll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer. For you using Yahoo! every day, it will better enable us to deliver products that make you say, “Wow.”

I’ve noticed that a lot of us on the inside don’t spend enough time looking to the outside. That’s why I’m creating a new Customer Advocacy group. After getting a lot of angry calls at my office from frustrated customers, I realized we could do a better job of listening to and supporting you. Our Customer Care team does an incredible job with the amazing number of people who come to them, but they need better resources. So we’re investing in that. After all, you deserve the very best.

We’re also leaning on this team to make sure we’re all hearing the voice of our customers (consumers and advertisers). I’m singularly focused on providing you with awesome products. Period. The kind that get you so excited, you have to tell someone about them. Whether on your desktop, your mobile device, or even your TV.

And that takes a real understanding of what you want/need/love/hate, how you’re using our products, and what you find simple, intuitive, easy and fun. Who wants innovation for innovation’s sake if it doesn’t make your life easier, more efficient, more productive? So expect us to hear you better and take better care of you.

Finally, a note about our brand. It’s one of our biggest assets. Mention Yahoo! practically anywhere in the world, and people yodel. But in the past few years, we haven’t been as clear in showing the world what the Yahoo! brand stands for. We’re going to change that. Look for this company’s brand to kick ass again.

Big thanks to the many of you who’ve reached out with positive comments. It’s clear people want Yahoo! to succeed. I’ll try to pop by here again soon, though probably not too soon. I have a pretty long to-do list.

Carol Bartz

CEO

What Was That You Were Saying About Mozilla Not Being an Arm of Google?

John Paczkowski — Thu, 20 Nov 2008 14:06:43 +0000

Mozilla renewed its search deal with Google (GOOG) last August, signing a three-year contract that ends in November 2011. Good thing too; the agreement was set to expire this month and if it had, Mozilla would have been forced to look elsewhere for the bulk of its income.

According to the organization’s latest audited financial statement, its revenue for 2007 totaled $75.1 million, up 13 percent from 2006′s $66.8 million. And 88 percent of that came came directly from Google, which pays Mozilla to be the default search engine in it Firefox browser.

So of Mozilla’s $75.1 million in 2007 revenue, $66 million was paid it by Google. That’s quite a sum. Large enough to pique the interest of the Internal Revenue Service, which is reviewing Mozilla’s nonprofit status and “challenging certain deductions,” according to Mozilla Foundation chairperson Mitchell Baker.

An interesting turn of events for Mozilla, which this time last year was claiming it would walk away from Google if that’s what it took to remain independent. “We’ve spent a lot of time and energy making sure that Google understands that it cannot turn us into an arm of Google,” Baker said at the time. “The things that make Mozilla and Firefox a success [are] the product, and the community that cares about it. First and foremost, we would protect those things,” Baker said. “If the protection of those things would come into conflict with Google, or any of our search partners, we would opt for the community who built Firefox and love Firefox…. There are other ways to make money from a browser.”

Good to know. Because you may need to pursue them when the IRS is through with you…