MySpace co-founder DeWolfe to step down (Update)

Apr 22, 2009
In this Jan. 24, 2009 file photo, Vanguard Award recipients MySpace Co-CEO's Chris DeWolfe and Tom Anderson, right, pose during the 20th Annual Producers Guild Awards in Los Angeles. MySpace co-founder DeWolfe will step down soon as the social networking site's chief executive, amid the site's stalled user growth and the rapid rise of Facebook, according to a report Wednesday April 22, 2009. (AP Photo/Gus Ruelas, File)

(AP) -- MySpace co-founder Chris DeWolfe will step down soon as the social networking site's chief executive, amid the site's stalled user growth and the rapid rise of rival Facebook.

MySpace owner . said Wednesday the decision was made by mutual agreement with former AOL Jonathan Miller, who was appointed News Corp.'s chief digital officer April 1.

DeWolfe, 43, helped launch the site in January 2004. He will remain on the board of MySpace China and be a strategic adviser to the company.

Co-founder Tom Anderson, 33, who is every account holder's first friend and acts as its glitch fixer and president, is also in talks about taking a new role. Anderson is being considered for a creative product role that will take him away from his day-to-day responsibilities, said a person with knowledge of the situation.

The person spoke on condition of anonymity because the discussion was confidential.

"Chris and Tom are true pioneers," Miller said in a statement. "Thanks largely to their vision, MySpace has become a vibrant creative community with 130 million passionate followers worldwide."

He said a new management structure will be announced soon.

Wednesday's announcement was apparently rushed out after rumors began circulating online.

Facebook lapped MySpace a year ago in overall users worldwide, and now has 200 million to MySpace's 130 million.

MySpace is still the largest social network in the United States, but membership appears to have stagnated. It had 70 million users in March, down 4 percent from a year ago, according to tracking firm comScore Inc., despite the launch of the MySpace Music service in September.

Meanwhile, Facebook's users in the U.S. rose 72 percent in March to 61 million.

DeWolfe is expected to move onto a new startup, following the path of several executives who left MySpace last month including former Chief Operating Officer Amit Kapur.

"It's been one of the best experiences of my life," DeWolfe said in a statement.

Anderson said in a statement he looks forward to working with Miller. "I love this business, and look forward to its next chapter."

Both men had contracts worth $15 million over two years, according to the person familiar with the situation. DeWolfe's contract, which he will not renew, is to expire in October.

The pair helped grow the company from seven employees to 1,600 today, launched operations in 30 locations worldwide, and proved social networks could attract advertising and be profitable. But they never managed to meet the lofty goals set by News Corp., the media conglomerate controlled by billionaire Rupert Murdoch that bought the site for $580 million in 2005.

Murdoch predicted in August 2007 that Fox Interactive Media - which houses sites such as MySpace, AskMen and Photobucket - would exceed $1 billion in annual revenue. So far, it has come up short, taking in $881 million in the year ended in December.

MySpace's U.S. ad revenue made up the bulk of that, with $585 million in 2008, according to an estimate by research firm eMarketer. The firm said that was nearly three times the estimated $210 million in U.S. ad revenue taken in by Facebook. Neither company divulges such numbers officially.

A substantial amount of MySpace's revenue comes from a $900 million, three-year ad-sharing deal it began with Internet search leader Google Inc. in 2007. That deal expires in August 2010, although the company may move again to auction off its search partnership to the highest bidder.

"That's going to dry up and, as you can see, their (profit) margins are pretty thin," said Julia Angwin, author of "Stealing ," which went on sale last month.

"They have to continue innovating. And they haven't done enough of that," she said. "They've focused a lot on the content, but not enough on the tools and features, which are really stale and need to be upgraded."

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Twitter blocks two accounts on its Turkish network

add to favorites email to friend print save as pdf

Related Stories

Fox News taps MySpace for citizen journalists

Apr 20, 2009

MySpace on Monday invited its members to become volunteer "uReporters" by supplying news pictures or videos for use at the social networking website and Fox News network.

Former AOL head to run News Corp. digital

Apr 01, 2009

Jonathan Miller, a former head of Time Warner online unit AOL, was named by News Corp. chairman Rupert Murdoch on Wednesday to oversee MySpace and other digital businesses at the media giant.

MySpace launches karaoke service in Japan

Mar 30, 2009

Online social-networking titan MySpace has launched a karaoke service in Japan, expanding its amateur crooner channel to a nation rich with lovers of the pastime.

Recommended for you

LinkedIn membership hits 300 million

Apr 18, 2014

The career-focused social network LinkedIn announced Friday it has 300 million members, with more than half the total outside the United States.

Researchers uncover likely creator of Bitcoin

Apr 18, 2014

The primary author of the celebrated Bitcoin paper, and therefore probable creator of Bitcoin, is most likely Nick Szabo, a blogger and former George Washington University law professor, according to students ...

White House updating online privacy policy

Apr 18, 2014

A new Obama administration privacy policy out Friday explains how the government will gather the user data of online visitors to, mobile apps and social media sites. It also clarifies that ...

User comments : 0

More news stories

Hackers of Oman news agency target Bouteflika

Hackers on Sunday targeted the website of Oman's official news agency, singling out and mocking Algeria's newly re-elected president Abdelaziz Bouteflika as a handicapped "dictator".

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.

Low tolerance for pain? The reason may be in your genes

Researchers may have identified key genes linked to why some people have a higher tolerance for pain than others, according to a study released today that will be presented at the American Academy of Neurology's 66th Annual ...

How to keep your fitness goals on track

(HealthDay)—The New Year's resolutions many made to get fit have stalled by now. And one expert thinks that's because many people set their goals too high.