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News Corp. Reboots MySpace to Recapture Young Crowd

MySpace President Mike Jones
MySpace President Mike Jones, seen here, said in an interview, “This is an entirely different product.” Photographer: Ramin Talaie/Bloomberg

News Corp.’s MySpace is introducing a new website design with a focus on younger users in a drive to stem subscriber losses and distinguish itself from Facebook, the biggest social network.

Starting today, most U.S. users will be able to access the site’s most-popular music and videos, updated in real time. They can choose between homepage views and earn rewards for postings, according to Beverly Hills, California-based MySpace. The new version will be available worldwide by the end of November.

News Corp. is trying to rejuvenate MySpace, which fell behind Facebook in U.S. users in May 2009, according to ComScore Inc. data. The strategy hinges on drawing 13-to-35-year-olds seeking an entertainment-centric social network separate from parents and other adults on Facebook, MySpace Chief Executive Officer Mike Jones said in an interview.

“This is a full rethink,” Jones said. “This is an entirely different product.”

The site lost less than $100 million in the year ended in June, MySpace said in an e-mail. That’s narrower than the $350 million loss estimated by RBC Capital Markets analyst David Bank.

MySpace wants users to connect based on shared interests in music, TV shows, films and celebrity news, among other categories, after previously helping subscribers simply link up with friends. A mobile version that doesn’t require users to have accounts will be available in mid-November, Jones said.

MySpace averaged 57.5 million U.S. visitors in September, 24 percent fewer monthly visitors than its peak of 75.9 million in December 2008, according to ComScore data. Jones, 35, joined MySpace in April 2009 as chief operating officer. The company today announced his promotion to CEO. Facebook has more than 500 million members worldwide.

Three Settings

Users can view the MySpace site in three settings. They can select a traditional homepage with a profile picture, columns separating friends, a running commentary and events. The site will still let users personalize pages with backgrounds, a feature not available on Facebook.

In another setting, a user’s entire screen is over taken by a slideshow of recommended videos, messages from friends and news flashes from bands and other interests.

A third setting displays a quilt of messages, media and tiles of information that are updated constantly.

The videos are pulled from TV networks including News Corp.’s Fox and from Google Inc.’s YouTube, and can be assembled into a personal TV playlist. A similar feature lets users assemble a music playlist that that others may share. Jones also replaced MySpace’s bright-blue logo with the word “MY” followed by a fill-in-the-blank space that will feature artwork from users, artists and celebrities.

Loyalty Program

MySpace plans to reward users who contribute content and attract a following. The more members upload videos and post on a topic, for example the Fox TV show “Glee,” the more MySpace will promote their profile. Users will also receive badges that let others know they are a “taste maker.”

Leading up to the debut of today’s redesign, Jones has cut homepage clutter, introduced mobile features and added the ability to sync accounts with Facebook and YouTube.

News Corp.’s digital operations, including MySpace, lost $575 million last year, according to company reports.

Chase Carey, chief operating officer of New York-based News Corp., set a goal of making MySpace cash positive by the end of the fiscal year ending in June 2011. News Corp. doesn’t break out results of MySpace, which it bought in 2005 with the $580 million purchase of Intermix.

Site’s Valuation

If the site doesn’t turn around, New York-based News Corp. will likely sell the business within two years, analyst Bank said. MySpace is worth about $300 million, Alan Gould, an analyst with New York-based Evercore Partners Inc., said in an e-mail.

News Corp., also owner of the Twentieth Century Fox film studio and the Wall Street Journal, gained 1 cent at to $14.32 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have advanced 4.6 percent this year.

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