MySpace's Mid Level Management Structure Is Crumbling
The problem with all of these people who are walking out the door at MySpace isn't so much the number of them, because MySpace is trying to replace them by hiring more people. It's the fact that the best people are leaving, and taking a lot of the knowledge base with them.
Context & Ripple Effects
The exodus is the visible stage of a restructuring that began well before this week: News Corp's unit planned cuts of 25% or more back in June 2009, installed former AOL executive Mike Jones as its reported No. 2, and pushed out the rest of the founding team ahead of Tom Anderson's exit by February 2010. What has changed now is who is leaving — per TechCrunch's reporting, not volume but quality, with the strongest mid-level managers taking institutional knowledge out the door.
That knowledge drain lands directly on MySpace's music strategy, which the company has been assembling through acquisition — iLike in August 2009 and Imeem completed in January — and which depends on retained staff to integrate. The backdrop is unkind: industry-wide attempts at search and brand ads on social networks delivered weak results against traditional online advertising, leaving MySpace little margin for execution error even as it touts being the top social app on Android.
First-order effects
- MySpace must replace departing mid-level managers with new hires who arrive without the product and operational context, slowing decision-making inside the organization right as it integrates iLike and Imeem.
- News Corp's new leadership layer under Mike Jones inherits a thinner bench precisely when it needs credible execution to counter Facebook's pull on users, advertisers, and now talent.
Second-order effects
- Rivals and startups gain a recruiting pool of experienced social-network operators, shifting scarce platform expertise away from MySpace toward whoever hires next.
- Advertisers already skeptical after poor social-ad performance have less reason to bet on a team in visible flux, pressuring the revenue line that funds the music push.
Third-order effects
- The pattern — founder exits, then mass-cut plans, then a quality-driven management drain — traces the standard decay curve of an acquired consumer platform under a media-company owner, where talent leaves faster than headcount falls and the asset is managed for cost rather than growth.
- If the best people keep exiting faster than replacements can ramp, MySpace's competitive position consolidates around its remaining differentiators (music, mobile distribution) rather than broad social networking, narrowing what the brand can credibly become.
The trend: Social networking in 2010 is consolidating around a shrinking set of winners, and MySpace's management exodus shows how quickly talent — not users — is the first asset to migrate when a platform's trajectory turns.