mySpace Founders Forced Out on Executive Pay & Culture Clash
Another scoop for TechCrunch, who reported over 24 hours before AP, the Wall Street Journal, and Reuters on the breaking story that mySpace co-founders Chris DeWolfe and Tom Anderson are being ousted from top management positions at the company and will likely step down. Though their contracts were not due to expire until later this year, the pair were earning $30 million USD per year at News Corp. A look at the forthcoming changes and the deeper reasons leading to the break points to serious trouble at mySpace.
“MySpace CEO Chris DeWolfe and News Corporation’s Chief Digital Officer Jonathan Miller, announced today that, by mutual agreement, Mr. DeWolfe will not be renewing his contract and will be stepping down in the near future. Mr. DeWolfe will continue to serve on the board of MySpace China and will be a strategic advisor to the Company. Additionally, Mr. Miller announced that he was in discussions with Tom Anderson, MySpace’s president, about Mr. Anderson assuming a new role in the organization. “1
“The company did not immediately name a replacement, and a company spokesperson declined to comment, but some speculate that former Facebook COO Owen Van Natta is a leading candidate.”2
According to traffic statistics, mySpace is still the largest social network in the US, but was down in membership overall 4% on the year, while US membership for Facebook rose 78% in March alone. Typically, founders leaving a site after a sell out to a corporate conglomerate means that the site is surely losing its original message, community, spirit, and philosophy. Huge changes have come to the site with the relaunch of mySpace Music; for underground pop and hip hop networking, promotion, clubs, concerts, and the like, mySpace is still the undisputed champion. Yet as it becomes a platform for mass, mainstream, commercialized music and video distribution, maybe Anderson and DeWolfe weren’t the best point men for the job.
The Wall St. Journal reports a long history of conflict between the pair and News Corp over the management of the company since the takeover:
“DeWolfe and Anderson still chafed at the fact that MySpace ad sales were taken over by executives at Fox Interactive Media, according to people familiar with the situation. The rank and file of MySpace was also angry that their stock options were canceled after the acquisition and that they were forced to move from Santa Monica to Beverly Hills, the people said.”
“Relations fell apart further. Mr. DeWolfe ignored suggestions from Fox Interactive Media President Ross Levinsohn about ways to improve the site. Mr. DeWolfe also sought to amend a $900 million advertising deal that News Corp. cut with Google Inc. — delaying its implementation, the people said.”
“Mr. Levinsohn also clashed with Mr. Anderson, who is president of the site. Mr. Anderson controlled the product development and was criticized for not moving fast. In April 2006, MySpace bought the online karaoke service kSolo. MySpace launched the karaoke feature on its site in April 2008 — two years later.”
“The tension between the MySpace founders and News Corp. eventually led to Mr. Levinsohn’s dismissal in November 2006. He was succeeded by his distant cousin, Peter Levinsohn, who eventually gave Mr. DeWolfe control of the advertising sales at MySpace that he had sought.”
…Three top MySpace executives, including Amit Kapur, former chief operating officer, left the company in March to work on a start-up. MySpace has yet to name successors for those positions.”3
TechCrunch has also released the email from News Corp Digital Media CEO Jonathon Miller to employees announcing the dismissals:
“I am writing to share the news that MySpace CEO Chris DeWolfe will be stepping down from his executive role in the near future. He has agreed to serve as a strategic advisor to the Company and will remain on the board of MySpace China. In addition, I am currently in discussions with MySpace President Tom Anderson regarding his role within the organization.”
“I want to take this opportunity to thank them both for their incredible contributions to the Company, and for pioneering one of the greatest social media revolutions of our time. I wish Chris nothing but the best in any new endeavors and, like many in this industry, am eager to witness his next innovations. I understand the importance of having a dynamic, inspiring and innovative management team, and am dedicated to ensuring that MySpace continues to benefit from the highest levels of passion and enthusiasm.”4
For the most part, I tend to agree with J Miller on this one… I look forward to hearing about the next project that Tom Anderson & Chris DeWolfe begin to work on.
Background:
http://kara.allthingsd.com/20080219/owen-van-natta-to-leave-facebook/
- http://www.newscorp.com/news/news_416.html [↩]
- http://news.cnet.com/8301-1023_3-10225519-93.html [↩]
- http://online.wsj.com/article/SB124043324710044929.html?ru=yahoo&mod=yahoo_hs [↩]
- http://www.techcrunch.com/2009/04/22/myspace-ceo-departure-the-email-to-employees/ [↩]
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if anyone cares, looks like myspaces CEO and everyone’s friend ‘Tom’ will be leaving the ocmpany http://tinyurl.com/cegpu2
RT @webdevnews New blog post: mySpace Founders Forced Out on Executive Pay & Culture Clash http://tinyurl.com/cegpu2 – Woah. Really…