News Corp. Exploring MySpace CEO Options
MySpace CEO Chris DeWolfe has been with the company since its August 2003 launch, seeing it through a 2005 $580 million sale to News Corp. and growing revenue to something approaching a billion dollars a year. 130 million people around …
Context & Ripple Effects
Chris DeWolfe has run MySpace since its August 2003 launch, steering it through the 2005 $580 million acquisition by News Corp. and building annual revenue approaching a billion dollars across roughly 130 million users. But News Corp.'s patience has been tested before: in June 2007 it explored swapping MySpace itself for a stake in Yahoo! [[a:1178755]], signaling the site was already viewed as a tradeable asset rather than a crown jewel.
The reported review of DeWolfe's role — still unconfirmed, per News Corp.'s own framing — lands amid a string of warning signs through early 2009: analysts see very low odds of renewing the Google search-advertising contract anywhere near its previous $900 million value, the aging Events product lags Facebook and Evite despite an experimental relaunch in March, and the company has leaned on patches like the Citysearch-powered MySpace Local partnership and the 2007 developer-platform-and-privacy counterstrike against Facebook [[a:1180705]].
First-order effects
- Chris DeWolfe's tenure — and that of co-founder leadership generally at MySpace — becomes the immediate decision point for News Corp. management, with the rumor itself forcing both sides to plan for succession even before any announcement.
- MySpace's product and partnerships calendar (Google ad renewal, MySpace Local rollout, the Events relaunch) now proceeds under a cloud of leadership uncertainty that complicates negotiations and hiring.
Second-order effects
- A weakened hand on the Google search-ad renewal shifts bargaining leverage toward Google, making the successor's ability to stabilize revenue the first test of any leadership change.
- Facebook faces less pressure to respond to MySpace's platform and local-listings moves if its rival is distracted by an executive transition.
Third-order effects
- The episode fits the broader pattern of media conglomerates replacing founder-CEOs once acquired social networks' growth decelerates — a structural shift from founder-led communities toward professionally managed advertising businesses inside parent companies.
- If News Corp. follows through, expect other acquired-social-network owners to treat executive turnover as the standard lever for resetting strategy, ahead of divestiture or restructuring decisions like those floated in the 2007 Yahoo! swap talks.
The trend: Acquired social networks are entering a phase where corporate parents swap founder-CEOs for operators to defend ad revenue, marking the end of the founder-led era at Web 2.0's first giants.