SAN FRANCISCO (Reuters) - Rupert Murdoch, hailed as the smartest media executive when he bought MySpace, now faces questions over his next move in the digital world as the social network tries to fend off growing rival Facebook.
The News Corp chairman is set to take the stage at an Internet conference in San Francisco late on Wednesday with MySpace Chief Executive Chris DeWolfe at his side in a rare presentation by the preeminent media mogul to Silicon Valley.
MySpace, the largest online social network with about 110 million users globally, is expected to pull in the bulk of the anticipated $1 billion revenue for News Corp’s Fox Interactive Media unit in fiscal 2008.
But privately held Facebook has surged to a strong second place in the social network world since it opened its site a year ago beyond an original base of college students and started allowing in May independent software makers to build applications for users.
While Facebook may claim over 40 million members, media reports have pegged its potential value to investors at $10 billion or more.
“There’s been so much excitement, energy and growth on the part of Facebook,” said Forrester analyst Charlene Li. “There’s a lot of pressure on MySpace to capture that energy.”
Internet blog TechCrunch got the ball rolling on MySpace last week, saying it was expected to announce a “MySpace Platform” at the Web 2.0 Summit in San Francisco.
That would allow third-party developers to create programs to run within MySpace.com in a manner similar to Facebook.
Rival blogs have disputed the report, dimming expectations of a major announcement. But industry analysts said they hoped to hear how MySpace might become more open to outside developers to keep people on its network.
“They have turned MySpace into another mainstream media property,” said Li. “People are excited but also skeptical about how much Fox ... understands this space. From my point of view, for a major media company they get it pretty well.”
MySpace is already taking steps to bulk up its presence and showcase its technology expertise. The company is opening an office in San Francisco this week with about 50 employees and may expand its team to about 200 people within the next year.
The company also entered into a partnership with Web calling service Skype to offer MySpace members free Internet calls over its instant messaging system. Skype is part of online auction network eBay Inc.
In explaining the new calling feature, MySpace’s vice president of product development, Kyle Brinkman, said he was especially pleased with the technology the company built to support it.
“It shows our technical chops a little bit and it’s part of a message we’re delivering here, that no other social network has built this kind of platform,” Brinkman said in an interview. “It’s not an easy thing to do, to build an IM platform that can compete with the likes of AIM (by AOL).”
Murdoch has two other new ventures likely to capture attention on Wednesday -- his planned purchased of Wall Street Journal publisher Dow Jones & Co and newly launched Fox Business Network on cable television.
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