Social entertainment website MySpace.com is dropping almost half of its staff in an ongoing transformation of its services.
Once the King of social networking, MySpace lost out to the phenomenal growth of Facebook over the past few years. News Corporation gave MySpace a limited time frame to turn around its loss-making services. The result was a relaunch as a “social entertainment” site aimed at “Generation Y”, which would be users aged 35 and younger.
The “restructuring” affects about 500 employees, representing 47 percent of the company. “These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product,” Chief Executive Mike Jones said.
News Corp has repeatedly indicated that it is open to selling the relaunched MySpace service to any interested parties, but reports just last week suggested that there are no ongoing talks.
Result for: chief executive
Adobe stock jumped on Thursday following reports in the media that Microsoft has identified it as an acquisition target. The New York Times reported that Microsoft chief executive Steve Ballmer met with Adobe CEO Shantanu Narayen in San Francisco recently to talk about Apple’s dominance in smartphones.
According to the report, which cited employees and consultants familiar with the situation, the two discussed several options to deal with the situation, one of which would see Microsoft acquiring Adobe. Adobe stock rose 17 percent to a high of $30 before settling back to close up 11.5 percent at $28.69 on the Nasdaq.
A Microsoft acquisition of Adobe would cost $15 billion or more based on Adobe’s current market value. It would provide Microsoft with control of Adobe’s flash player, used all over the web for video and graphics. Wall Street analysts see it as a possible way for Microsoft to integrate graphics and video capabilities into software it develops for phones and tablet computers.
“It’s certainly possible,” said Morningstar analyst Toan Tran of a potential deal. “It may be a case of ‘the enemy of my enemy is my friend’ and both Microsoft and Adobe have a common enemy in Apple. The Flash platform in Microsoft’s hands might be an interesting competitive weapon against Apple.”
Microsoft already has its own Silverlight media platform, but it has failed to gain prominence in the market.
Result for: chief executive
In April, AOL sold one of the pioneers of instant messaging, ICQ, to Digital Sky Technologies Limited (DST) for $187.5 million USD.
Today, AOL has completed that sale, with Tim Armstrong, Chairman and Chief Executive Officer of AOL saying the company will use the proceeds to either buy media properties or hoard the cash for emergencies.
Despite losing popularity in the United States to other services such as MSN Messenger and AIM, ICQ remains the most popular IM service in Russia and other smaller international markets.
“The acquisition of ICQ is a strategic enhancement of our business in Russia and Eastern Europe. ICQ’s long-standing brand name and its sizeable loyal customer base together represent a very attractive opportunity to further strengthen our position in the region,” added Yuri Milner, Chief Executive Officer of DST.
ICQ was created in 1996 by Mirabilis of Israel, and AOL purchased the parent company in 1998.
Reads the SEC notice: As previously announced, on April 28, 2010, AOL Inc., (the “Company”) entered into a Securities Purchase Agreement (the “Agreement”) with Digital Sky Technologies Limited, a British Virgin Islands company (“Digital Sky”), for the sale of the Company’s ICQ operations (“ICQ”).
