MySpace News Corp, is to slash 420 jobs in the US, as it battles to develop a strong business around Web 2.0 social media.
The social networking site, which was bought by News Corp in 2005 for $585m, has faced stiff competition from Facebook. Earlier this year Facebook overtook MySpace in the popularity stakes.
While News Corp claims MySpace is worth over $6bn, experts believe MySpace and other social networking sites are struggling to commercialise their brands, despite having more than 80 million registered users.
In a statement which has been published on a number of websites, MySpace CEO Owen Van Natta, said, "I believe this is the first difficult step toward a major turnaround - a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company. Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort. We are developing a process that will empower anyone in the company to contribute ideas and enable us to integrate your thoughts into our plans for the future. We will follow-up with details on this process in the coming weeks."
One expert in social media technology said it is still not clear how social media websites will make money. "If it was known, Facebook would be doing it."