MySpace CEO Owen Van Natta Steps Down

Hirschhorn and Jones Become Co-Presidents

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NEW YORK ( -- News Corp.'s plan to resurrect MySpace just got a bit more complicated.

Owen Van Natta
Owen Van Natta
Owen Van Natta, the former Facebook exec tapped a year ago to turn around the once high-flying social network, has stepped down as CEO. He will be replaced by his two top deputies, Chief Operating Officer Mike Jones and Chief Product Officer Jason Hirschhorn, as co-presidents.

Messrs. Hirschhorn and Jones will report to News Corp.'s chief digital officer, Jon Miller, the one-time CEO of AOL who was appointed last year by News Corp. CEO Rupert Murdoch to oversee all of his media empire's digital activities but, most importantly, to fix MySpace, which has been bleeding users and revenue for several years.

"Owen took on an incredible challenge in working to refocus and revitalize MySpace, and the business has shown very positive signs recently as a result of his dedicated work," Mr. Miller said in a statement. "However, in talking to Owen about his priorities both personally and professionally going forward, we both agreed that it was best for him to step down at this time."

Another setback
The departure of Mr. Van Natta is another setback for Mr. Murdoch, once cast as a digital visionary for picking up MySpace at the dawn of the social-networking craze for what seemed like a bargain price of $580 million in July of 2005. MySpace was well ahead of Facebook, which was at the time still a college-campus phenomenon. A year later, MySpace was minting money by selling display advertising largely to the entertainment industry, and inked a three-year, $900-million search deal with Google. That year it also registered its 100 millionth user.

But MySpace was, in a sense, a victim of its own success. Users were soon turned off by its cluttered design and the constant assault of commercial messages. Meanwhile, Facebook started to gain steam and quickly went global, while MySpace remained very much a U.S. phenomenon. In 2008, Facebook surpassed MySpace in registered users and MySpace saw its revenue start to dwindle. Last year the company said it had received $100 million less than anticipated from the Google deal, due to its inability to meet search targets.

Mr. Murdoch brought in Mr. Miller last year and he hired Messrs. Van Natta, Jones and Hirschhorn to turn the company around. One of Mr. Van Natta's first moves was to cut 400 positions, or 30% of the company. Immediately MySpace stopped attempting to compete with Facebook and through initiatives like MySpace Music tried to transform into an entertainment destination, where users connect as much to their own interests as to other users.

Frustratingly slow
A person close to the company said Mr. Van Natta had grown frustrated with the slow pace of change, hindered by an entrenched culture but also the difficulty in finding and retaining engineers in the Los Angeles area to speed the restructuring of the site. Rumors surfaced on several blogs last week that Mr. Hirschhorn was leaving the company, but they were ultimately unfounded.

Prior to joining MySpace last April, Mr. Hirschhorn was president of Sling Media's entertainment group; he was also chief digital officer at MTV Networks. Mr. Jones founded Userplane, a startup acquired by AOL in 2006, where he subsequently served as a senior executive.

The shakeup increases pressure on Mr. Miller to show that MySpace can be turned around and become a driver for News Corp.'s digital businesses rather than an albatross. News Corp. lost $125 million at the unit, which contains its digital businesses, in the quarter ended in December, including a loss of $29 million on dispositions like the sale of Rotten Tomatoes and Photobucket.

Last week, Facebook announced that on its sixth anniversary it had crossed 400 million global users. On its site, MySpace said it has "over 100 million users" worldwide.

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