News Corp sees MySpace as place for videogames

PASADENA, California Thu Jul 23, 2009 8:31pm EDT

Jon Miller, chairman and CEO, Digital Media Group and chief digital officer for News Corp. speaks at the Fortune Brainstorm Tech 2009 in Pasadena, California July 23, 2009. REUTERS/Fred Prouser

Jon Miller, chairman and CEO, Digital Media Group and chief digital officer for News Corp. speaks at the Fortune Brainstorm Tech 2009 in Pasadena, California July 23, 2009.

Credit: Reuters/Fred Prouser

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PASADENA, California (Reuters) - News Corp hopes to transform MySpace, which has been losing users to Facebook, into a stronger online videogaming platform as it works to reposition the six-year-old site as an entertainment destination.

News Corp digital head Jonathan Miller said on Thursday he wants to expand the videogame platform on his company's sagging social networking site, which lags Facebook in number of users.

At the Fortune Brainstorm: TECH conference in Pasadena, California, Miller said he saw opportunities to make MySpace's gaming platform better geared to videogame suppliers who then will want to launch their products on the site and employ its user data to better develop games.

"MySpace is and will be more in the future a gaming platform, a space for people to meet and play games," Miller said.

Analysts have been doubtful on MySpace's entertainment drive, given that Google's YouTube dominates the user-generated video content space, while professional video is led by Hulu.

That leaves gaming. A focus on videogames could help MySpace revitalize itself and better compete against Facebook, which recently surpassed 200 million active users and has vaulted ahead of MySpace.

Facebook had more than 307 million unique visitors in April, while MySpace had less than 125 million, according to comScore.

Last month, Facebook surpassed Myspace's peak number of unique monthly users in the United States, 76.3 million, set in October 2008, according to the research house.

MySpace already has a portal where users can play videogames with friends online. Facebook hosts a number of casual games, from Scrabble to chess.

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But Miller described videogames as an opportunity for expansion not only for MySpace, but for owner News Corp, which has the Fox network and movie studio and other media companies.

"None of the traditional media conglomerates are also significant video game players, so to speak, and I think that that's the missing piece of the equation, particularly when you see how much time is spent playing games online," Miller said.

News Corp bought MySpace in 2005 for $580 million when the social networking website was highly popular, especially among younger Internet users.

But with MySpace losing ground to Facebook and Twitter, News Corp recently ousted MySpace co-founder and CEO Chris DeWolfe and installed its own management team.

In a cost-cutting move, MySpace laid off more than 400 workers, or 30 percent of its staff, in the United States.

At the conference, Miller was asked during an on-stage session to talk about News Corp chief executive Rupert Murdoch's recent assessment that MySpace should become an "entertainment portal".

"You must focus, and in our case we are focusing on music, games, video, things like that," Miller said.

It was not clear if MySpace would leverage more entertainment content from parent company News Corp and its television and movie divisions.

Miller told Reuters that while MySpace will not become primarily a gaming destination, it will be a crucial theme.

"If you look at the big activities online, games right now is number three," he said. "Communications, search, games. So it's clearly going to be a major focus."

He added that News Corp could possibly make acquisitions to bolster MySpace's video game platform, though he had no specific targets in mind.

Richard Greenfield, an analyst with Pali Research, said in a report MySpace could use gaming to reestablish itself, but that "acquisitions would likely be needed to move the needle".

(Reporting by Alex Dobuzinskis; Editing by Edwin Chan, Gary Hill)

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