Facebook overruns MySpace in US

It may come as small surprise to international users of Facebook, but latest data indicates that the social networking site has matched or overtaken MySpace in the US in terms of number of visitors. While Facebook has been globally more popular, MySpace had so far been on top in America.

The scenario is rapidly changing. Data released by tracking firm comScore on Tuesday shows that while Facebook is gathering momentum, MySpace is showing a downward trend.

If the point needed further stressing, MySpace, owned by Rupert Murdoch's News Corp, said on Tuesday that it is cutting nearly 30 per cent of its work force in a bid to become more efficient, bringing its staffing level more in line with Facebook.

The move, the latest cost-cutting effort at the site, comes less than two months after MySpace hired former Facebook executive Owen Van Natta, 39, as its new chief executive. "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company," Van Natta said in a statement.

The cuts amount to about 420 people, bringing the total number of MySpace's US staff to 1,000. As of May, Facebook had about 850 employees worldwide, the vast majority in the US.

MySpace's base has stagnated at about 125 million worldwide users, while Facebook said its usage has doubled to more than 200 million in less than a year. Until now, MySpace still had the edge among US users, but now the comScore figures show that in May, MySpace and Facebook both had about 70 million users apiece in the United States.

MySpace continues to generate more revenue - according to internet research firm eMarketer, it generated about $605 million in global advertising revenue last year, compared with $250 million for Facebook. MySpace's revenue is expected to shrink next year while Facebook's is seen as growing.

Jonathan Miller, the former AOL chief executive hired as News Corp.'s chief digital officer in early April, said the social hub's work force had grown "too big considering the realities of today's marketplace", while Van Natta said the goal was to put the site on a more entrepreneurial footing and "return to an environment of innovation".

The job cuts follow the departure of MySpace co-founder Chris DeWolfe as chief executive officer in April. Co-founder Tom Anderson, who is every account holder's first friend and acts as its glitch fixer, is also in ongoing talks about taking the creative product role away from his day-to-day responsibilities.

Keep on running
MySpace has its strengths, primarily as a social-networking site for artists, including musicians and comedians. And most sites would also be envious of drawing more than 70 million unique monthly visitors in the US alone.

Last month, Van Natta said he took the job at MySpace for the opportunity to build the site. He said MySpace has distinguished itself from Facebook by allowing users to be "super-creative" in designing their pages.

News Corp has said MySpace is unusual for a social networking site in that it is profitable, but noted that ad revenue in the quarter through March fell 16 per cent and costs rose due to last fall's rollout of MySpace Music, a song-streaming joint venture with major recording companies.

The media company's "other" segment, which houses MySpace, posted a loss of $89 million in the quarter, much worse than the $7 million loss a year earlier. A continued decline would come at a devastating time for MySpace, which is approaching the end of its three-year, $900 million paid-search deal with Google.

Most web observers feel that Facebook deserves the pole position, as it has been an innovator in opening its platform and has resisted the ad-blitz trap that transformed MySpace into a ''gaudy sensory overload'' as one analyst put it.

However, in the rapidly changing Web 2.0 world, all top positions are temporary, and Facebook can't afford to rest on its laurels. ''It is blazing now, but it will never be able to stop running,'' as one analyst puts it.