MySpace Farms Out Overseas Ad Operations
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The embattled social network MySpace today announced the first step in its international reorganization, saying it plans to farm out advertising operations in several foreign countries in an arrangement with a division of its parent company, News Corp.
Fox International Channels (FIC), the media conglomerate's unit that develops TV and Web content overseas, is taking over local advertising and marketing responsibilities for MySpace's local sites in several countries in Europe and South America.
MySpace said the partnership will enable it to maintain a sales force -- albeit by proxy -- in the affected markets as it continues to trim its workforce amid an ongoing reorganization.
"This initiative, which is the first result of our international operational review, will allow MySpace to continue serving the needs of our users, partners and advertisers across some of our fastest growing territories," MySpace CEO Owen Van Natta said in statement.
Through the partnership, FIC will manage local advertising and content for MySpace in Brazil, Argentina, Spain, Italy, Poland, Mexico and Turkey. A spokeswoman for MySpace told InternetNews.com that the company will eliminate all positions in those markets, but declined to say how many employees would be affected.
Today's announcement follows closely on word from MySpace that it planned a thoroughgoing review of its overseas operations as part of a major cost-cutting movement. In late June, MySpace said it planned to reduce its overseas headcount from 450 employees to 150. Two weeks earlier, MySpace said it planned to slash its domestic workforce by 30 percent.
At the time, Van Natta described the company's staffing levels as "bloated," citing the need to return to a more "nimble" company with a "start-up culture."
At one time the dominant social network, MySpace has come under increasing competition from Facebook and Twitter as its user base has plateaued. In May, Facebook jumped past MySpace by measure of U.S. visitors, according to online metrics firm comScore. Those figures put a symbolic end to the changing of the guard that began in earnest last year, when Facebook eclipsed MySpace in international traffic.
Through its overseas reorganization, MySpace has said it plans to establish London, Berlin and Sydney as its primary international hubs, leaving its other foreign offices subject to review and potential elimination.
The spokeswoman for MySpace said that the company is still reviewing its operations in Canada, France, India, Russia and Sweden, areas that were not affected by today's announcement.