Big Layoffs Expected at MySpace
By Anna Johnson on March 24th, 2009Pali Research analyst Rich Greenfield has done a little number crunching and expects that Fox Interactive Media, the News Corporation unit that runs MySpace, will have no choice but to initiate “sizable layoffs” within the next year or so.
The prediction is based on MySpace’s search revenues dropping by up to 50 percent following the conclusion of its current search deal with Google, which is expected to account for about $300 million in revenues for each of 2009 and 2010.
That’s about 35 percent of Fox Interactive Media’s total revenues.
If Google refuses to pay any more than half those amounts when it signs a new deal to cover 2011 – i.e. there’s a 50 percent drop in search fees – then, despite some growth in organic revenues, profits are likely to take a big hit.
The upshot? Cutting costs to save profits… with layoffs a likely way to cut those costs…
Source: Nicholas Carlson, “Sizable” Layoffs Coming To MySpace, Fox,” Silicon Alley Insider,
March 17, 2009
