MySpace Tries to Recover Its Cool

Site Aims to Become an Online Hangout That Connects Friends Around Entertainment

A new executive team at MySpace is trying to reignite the brand by focusing on areas like music, videos and games as users abandon the social-networking site for cooler destinations.

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Jay-Z performs in September as part of a MySpace program that puts on free concerts for MySpace users.

MySpace, which is holding a conference this week for its global ad-sales staff, needs to lure visitors back and kick-start advertising revenue, ad executives say. Research firm eMarketer estimates U.S. ad spending on the site will be $495 million this year, down 15% from $585 million in 2008.

The basic challenge is similar to the one facing big Internet companies, such as Time Warner's AOL and Yahoo, that are under pressure to reinvent themselves for fickle audiences.

"I've been in the Internet business for 15 years. There's always the new, new thing," says Jason Hirschhorn, the company's chief product officer. "Everybody plateaus at some point. The ones that remain remain relevant with their user base."

In a strategy shift, MySpace is striving to become an online hangout for people to connect with friends over entertainment content, whether it's the new Pearl Jam album, blogs from celebrities like British pop singer Lily Allen or a karaoke contest for the Fox musical comedy "Glee."

MySpace says ramping up its technology initiatives to create new products that let users share such content with friends is an essential part of its strategy.

MySpace's online-hangout push marks an effort to focus its offerings and differentiate itself from rival Facebook. As an entertainment site, MySpace would compete for ad dollars with a broader group of Web sites, including online video sites like Google's YouTube and Hulu, a joint venture of General Electric's NBC Universal, News Corp. and Walt Disney. It also would compete against music sites like Pandora and portals like AOL, which is also trying to reinvent itself with a push to create content.

"This is not an all-things-for-everybody portal," Mr. Hirschhorn says. "This is a social entertainment experience."

Fox and MySpace are owned by News Corp., which also owns Dow Jones & Co., publisher of The Wall Street Journal.

Digits

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To take its new pitch to Madison Avenue, MySpace has hired former MTV executive Nada Stirratt as chief revenue officer, responsible for overseeing global ad sales. Ms. Stirratt, 44 years old, most recently worked as executive vice president of digital ad sales at Viacom's MTV Networks.

MySpace CEO Owen Van Natta, who was hired nearly six months ago to revive the site and has since turned over almost the entire executive suite, introduced Ms. Stirratt to staff this week at the sales conference, during which executives outlined the company's strategy.

Although MySpace drew an audience of 64.2 million unique U.S. visitors in August, that figure is down 15% from the same period a year earlier, according to comScore. Facebook drew 92.2 million unique U.S. visitors in August, more than double the number a year earlier.

Like her rivals, Ms. Stirratt will have to address broader, looming questions about the viability of social-networking sites as a place for advertising.

Marketing via social-networking sites isn't simply about buying ads on a page. It requires that marketers interact with users on the sites, says Greg Smith, chief operating officer at Neo@Ogilvy, a digital ad agency owned by WPP. "It requires a whole new way of thinking," he says.

MySpace declined to make Ms. Stirratt available to comment.

Ms. Stirratt, who earlier in her career directed sales at Internet-ad company Advertising.com, has a reputation on Madison Avenue as a savvy businesswoman who understands the technical side of the Internet business but also knows how to build creative ad sponsorships that attract dollars from big brand advertisers.

So far, most of the developments under the new MySpace management team have focused on cleaning up the underlying technology of the site and making it easier for visitors to use. Users previously couldn't upload a photo to blog posts, for instance.

MySpace also is reconfiguring search technologies for the site and has removed features that didn't fit into its new strategy, including weather, jobs and classifieds. In the past few months, it has released features including a fresh homepage for its music site and a feature that connects to Twitter, the microblog site.

Further developments are likely to center on building technologies that let users more easily share entertainment.

Ad executives say that MySpace Music has registered some success, drawing 24.8 million unique U.S. visitors in September, up 24% from a year earlier, but they say they have yet to see major changes across the board for MySpace.

MySpace lost its way over the years as it got caught up in a race with Facebook, launched disparate initiatives and let technology and new-product developments lag, ad executives say.

Those missteps cost MySpace much of its buzz on Madison Avenue, says Shiv Singh, vice president and global social-media head at Razorfish, the digital-ad agency owned by Publicis Groupe.

"Marketers want to align their brands with the newest and the greatest. Currently, that is Facebook and Twitter," Mr. Singh says.

"Hardly a day goes by without a client asking me, 'What should I do with Facebook?' I don't get anywhere near as many questions about MySpace," he adds.

"They are not hiding from the challenges," says Doug Neil, senior vice president of digital marketing at GE's Universal Pictures, which recently bought promotions on MySpace for its films "Cirque du Freak: The Vampire's Assistant" and "Couples Retreat." He adds: "But can they re-steer the ship?"

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