Facebook forces MySpace to get a face-lift

Facebook forces MySpace to get a face-lift

It got Rupert Murdoch on the cover of Wired Magazine, cost Tom Freston his job as chief executive of Viacom and even spawned a tell-all book.

But now News Corp.'s MySpace has gone from crown jewel to problem child.

While MySpace remains the largest social network in the U.S., rival Facebook, which rules the rest of the world, is closing the gap fast. In terms of buzz, it's no contest at all. MySpace has gone from the place where the cool kids hang out to the scary house down the street that parents tell their children to stay away from.

Integrating MySpace into the rest of News Corp. has also proved something of a challenge. Rather than use MySpace as the major platform for programming from its Fox TV operations, it opted instead to team up with NBC Universal and create Hulu as the online home for its content.

Now it's up to former Facebooker Owen Van Natta to reinvigorate MySpace. As Facebook's chief revenue officer and vice president of operations, Van Natta played a key role in the site's evolution from a college clique to worldwide block party.

But social networkers are a fickle bunch and comebacks are hard to manufacturer. Just ask Friendster. Even Facebook is now no doubt looking over its shoulder at Twitter, the fast-rising social networking site for people who find posting complete sentences just a little too taxing.

Van Natta's first task may be updating MySpace's look and technology. The site seems tired compared to Facebook, which sometimes takes heat for all its tinkering but ultimately is quicker to respond to how its members are using it.

Another challenge will be building MySpace's ad revenue. The social networking site's groundbreaking $900-million deal with Google ends in the spring of 2010 and those will be tough dollars to replace. While online advertising continues to grow at a far faster pace than traditional media, it too is being hit by the economic downturn as well as concerns about its effectiveness.

Van Natta may also be walking into hostile territory as many of the staff there spent years working with the now-exiled MySpace co-founder Chris DeWolfe and its president Tom Anderson, who may soon follow DeWolfe out of the company he helped build.

And then there is Murdoch himself. While MySpace is still a key part of News Corp.'s Internet strategy, it doesn't take much to fall out of favor with the mogul. Just ask the Dodgers and DirecTV. 

--Joe Flint

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