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MySpace co-founder Chris DeWolfe to step down

COMPANY TOWN

DeWolfe's departure before the end of his contract suggests News Corp.'s growing dissatisfaction with the social network.

April 23, 2009|Dawn C. Chmielewski

MySpace co-founder Chris DeWolfe, the marketing guru with a laid-back, surfer-dude demeanor who took the social network from its ragtag beginnings to Internet phenomenon, is departing the company before the end of his contract.

Parent company News Corp. said DeWolfe was leaving by mutual consent. Nonetheless, his exit comes as the media giant's newly installed chief digital officer, Jon Miller, undertook an evaluation of MySpace and concluded that it was time to bring in new management to oversee the social network, according to a person close to the situation.

The decision suggests News Corp.'s growing dissatisfaction with the company that it acquired for $580 million but that is now losing ground to rival Facebook, which has been making rapid gains in users, even in the U.S., where MySpace has dominated.

Analysts say MySpace, based in Beverly Hills, has been slow to adopt technological innovations that have buoyed its Silicon Valley-based competitor.

"The MySpace platform did not evolve. It was doing the same thing," said Charlene Li, founder of Altimeter Group in San Mateo, Calif. "Whereas Facebook, every couple of months, there's a major change, and they drag the members along with them."

However, MySpace has been more effective than Facebook in finding ways to generate revenue on its giant audience, through initiatives such as an advertising partnership with Citysearch, which lets users comment on local restaurants, bars and other night spots. MySpace also has technology that allows businesses to target their ads by geography.

DeWolfe's successor will need to find ways to reignite MySpace's growth. Advertising revenue has been falling in the recession, and Facebook has grown in popularity through features such as Twitter-like "updates" that allows users to send mass e-mail bulletins. A major advertising partnership with Google also expires next year, and MySpace may not be able to negotiate as favorable a deal as it did the first time.

Owen Van Natta, Facebook's former chief revenue officer, has emerged as a contender for the top job at MySpace, according to people familiar with the matter.

Van Natta left the burgeoning online social network in February 2008 and ultimately landed the chief executive's job at ProjectPlaylist, an interactive music streaming site. His name was mentioned last year among the finalists to run MySpace Music, a joint venture with the major music labels. That job that ultimately went to MTV Networks executive Courtney Holt.

DeWolfe will continue to serve on the board of MySpace China and will be a strategic advisor to the company.

MySpace co-founder and President Tom Anderson wants to remain with the company and is in discussions about assuming a new role in the organization, said a person with knowledge of the matter.

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dawn.chmielewski@latimes.com

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