NEW YORK -- MySpace, the online social hub that's been fighting to stay relevant in the age of Facebook and Twitter, is overhauling its image and its website into an entertainment destination for its mostly younger audience.
The social-networking pioneer, which was among the top Internet sites just a few years ago, now has its sights set decidedly lower. Starting Wednesday and over the next month, MySpace will be relaunching its site to focus on giving users more ways to consume music, videos and celebrity gossip.
Entertainment has long been central to the MySpace experience, but over the years the site was also pulled in different directions as it dabbled in classifieds, job ads and even user reviews in a partnership with Citysearch as it pushed to become a social portal for the Web. It didn't work out, and Facebook is now emerging as that portal.
MySpace CEO Mike Jones said the relaunch "pulls us out of the social networking category" to become a social entertainment destination. So instead of connecting with long-lost friends and sharing baby photos, MySpace wants to be the place where people go to find out about new bands, chat about TV shows and make movie recommendations.
"The vision has definitely gotten a lot smaller in this redesign," said Debra Aho Williamson, a senior analyst at research firm eMarketer. "When News Corp. bought MySpace it certainly didn't envision this. I don't think Rupert (Murdoch, News Corp.'s CEO) thought MySpace would be a small social entertainment website."
News Corp. bought MySpace for $580 million in 2005. For some perspective, that's the same year YouTube launched. After a promising start, the site's luster began to fade and advertisers, along with users, flocked to Facebook. EMarketer estimates that advertisers worldwide will spend about $347 million on MySpace this year, down from $470 million in 2009. The research firm estimates 2010 ad spending on Facebook to be around $1.3 billion, more than double $665 million a year earlier.
In the most recent quarter, the News Corp. segment responsible for MySpace lost $174 million, mostly due to lower search and advertising revenue. News Corp. reports fiscal first-quarter results on Nov. 1.