MySpace Rebels With A Cause. What the FIM Is Going On?
April 5th, 2008
The news that Fox Interactive Media (FIM) was decentralizing, (as scooped by techcrunch and covered elsewhere) and carving out its individual brands, most notably MySpace and IGN, into standalone silos should be welcomed by the technology, creative and business communities.
This is the first step in a maturing process for intrinsically rebellious MySpace, which despite the multiple doom-and-gloom rants about its eminent demise, remains an 800 lb gorilla in the web ecosphere and will continue to do so as long as it moves towards independence from its corporate parent.
FIM was due for an attitude adjustment. The notion that the News Corp owned brands could be brought under one roof to share resources and enhance business “FIMergies,” especially in Sales, Advertising Product and Platform development, while noble, proved anathema to success. FIM announced they’ll miss revenue targets this year and while some wondered if their target was arbitrary and inflated, it was clear to many that MySpace, which drives the lion’s share of FIM’s earnings, was suffering from a combination of market fatigue, negative consumer sentiment, challenges from Facebook, and personnel turnover.
It was time for a change and with any transition to create efficiencies, there comes pain.
So what prompted this breakup?
This adjustment comes after a difficult realization that MySpace and IGN, as media platforms, are vastly different animals. The behave differently as brands and technologies and therefore should be sold differently.
MySpace is a social network where word-of-mouth is the community’s currency. IGN is an editorial site where experts provide reviews and insights into genre specific products such as video games.
So what does the decentralization mean and why should we embrace it? It means that:
- The reorganization had been in the works for a while, at least since Chris DeWolfe and Tom Anderson, two of MySpace’s founders reupped their contracts to stay on at the company in October 2007.
- Chris gets more control of the product, brand, operations and business strategy of MySpace. Given that he’s a fellow graduate of USC’s Marshall School of Business we can assume great success.
- Tom can focus on the music industry and promoting emerging bands and artists where he has said his passion lies.
- The FIM sales teams will be transitioned into either MySpace or IGN and can better serve their clients by delivering more specialized and therefore more efficient and effective ad products and campaigns.
- Adam Bain and the advertising products team have been out of the FIM office for over two weeks, having taken over the recently vacated Yahoo offices in Santa Monica. Adam is a whizkid who has been running technology at Fox Interactive for a long time. Now he gets a shot to be President of the FIM Audience Network. If I were a betting man, I’d expect that they’ll seek to build an ad serving product toolset for a publisher network the anchor client of which will be MySpace
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- Theoretically, this product will be a white-label solution for a publisher network the likes of which will attempt to compete with the existing ad networks including Ad.com, Yahoo and Google’s DoubleClick. This group includes some of the smartest people I know and I’ll be watching closely to see what comes out of their labs.
- Chief Revenue Officer Michael Barrett is out because he’s too big of an exec to be slotted within MySpace or IGN and there’s no business rationale why he should stay at FIM. He’s a veteran player in the space and despite the tight market will find greener pastures somewhere else.
- Each branded company will have its own P&L and will be accountable for its own financial performance.
- FIM might go away. The vision of FIM as a top down organization to manage the allocation of shared resources across a diverse portfolio of branded sites is dead in the water.
This move exemplifies the ongoing battle between fragmentation and aggregation, which I referred to in my initial post.
The web resists centralization. The basic principle that there is an infinite amount of data that can live online dictates that it’s futile to try and round up that data and set a top down strategy to sell it.
Now that FIM and MySpace have broken up, this is a chance for the latter to grow on its own.
What does that independence means for MySpace long term?
I’m not sure, but it certainly takes them one step closer to being fully spun off and sold either partially or fully from under the News Corp umbrella. They have a long way to go before an IPO could be justifiable to the market, but like any teenager on the rebound, just stay tuned, everything could change tomorrow.
Tags: adam bain, FIM, fragmentation vs aggregation, michael barrett, myspace, news corp, peter levinsohn, techcrunch
Posted by: jake Posted in Advertising, Business, News, TechnologyYou can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
April 5th, 2008 at 5:30 pm
[...] From the Office of the Principal wrote an interesting post today on MySpace is Wise to Break Up With FIM. What It…Here’s a quick excerptWise Move Young MySpace I Say The news that Fox Interactive Media (FIM) was decentralizing, (as scooped by techcrunch and well-covered elsewhere) [...]
April 14th, 2008 at 11:18 pm
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May 8th, 2008 at 11:32 pm
[...] With their data portability initiative, MySpace takes the first real step in developing a database for the broad publisher and consumer network ultimately designed for the contextual, hyper-targeted ad platform toolset (that’s a mouthful) under development by Adam Bain and the Audience Network team (if you need some context, read my post on the break up of FIM). [...]
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