Not even a week into the new year, the ebb and flow of Rupert Murdoch’s media ambitions are on full display at News Corp.
As Murdoch prepares over the next several weeks to bow his new iPad-only newspaper, the Daily, for which he’s hired a staff of nearly 100, News Corp.’s MySpace division could pinkslip as many as 500 workers shortly. The layoffs may be a precursor to a sale for the once wildly popular social networkingsite whose traffic continues to dwindle as Facebook explodes.
Five years ago, jazzed by the potential of social media, Murdoch placed a big bet by spending $580 million to buy MySpace. But the website has been a money-loser for Murdoch, and his enthusiasm has clearly waned. While MySpace is undergoing a major revamping, News Corp. execs have not ruled out selling the division. The News Corp. unit to which MySpace belongs lost $156 million in the quarter ended Sept. 30.
Now execs are considering cutting 30%-50% of MySpace’s staff of more than 1,000, a source confirmed on Tuesday. The Wall Street Journal, a News Corp. property, first reported the layoffs.
It would the second major downsizing at MySpace after hundreds of workers were let go last summer.
Meanwhile, Murdoch’s latest obsession is the potential of the iPad. Since last summer, he has been closely involved with creating a newspaper to be made available only on the iPad and eventually on other tablets. He lured a senior digital executive, Greg Clayman, away from MTV Networks to run the business side of the Daily, and tapped New York Post veteran Jesse Angelo to oversee editorial. The Daily, in which Murdoch is reportedly investing at least $30 million, is expected to debut before the end of January. The cost to subscribe will be 99¢ per week.
By 2015, more than a third of U.S. consumers will be using a tablet PC like the iPad, Forrester Research predicted this week. Clearly, Murdoch wants to be first in creating groundbreaking news delivery for the new technology.
Murdoch is famously ambitious when passionate about certain media, but he’s also known to move on quickly to the next big thing. In 2003, News Corp. bought the controlling interest in U.S. satcaster DirecTV, only to swap it out to John Malone five years later. That move came as Murdoch was enthusiastically helping to remake the Wall Street Journal, which he purchased as part of Dow Jones a year earlier for $5 billion.