MySpace CEO Mike Jones has the challenging task of rejuvenating a faded brand. He is overseeing a re-launch of the still popular site, that despite its size –130 million unique users worldwide – has become far less important than Facebook. MySpace no longer is challenging Facebook directly. In fact, it recently signed a deal with Facebook to allows its users to sign up for MySpace using their Facebook credentials. An entrepreneur before joining MySpace as chief operating officer in April, 2009, Jones became co-CEO in January and sole CEO in June. In an interview earlier this month he discusses how he’s trying to re-position MySpace and how much times he’s got from News Corp (NWS)., MySpace’s owner, to get that job done. An edited transcript follows.
Fortune: MySpace just several years ago was all the rage in social networking. It’s really taken a backseat to Facebook in particular, but others. It’s been sort of a dramatic reversal. First, explain how MySpace got in that situation.
Mike Jones: Well, my belief is that MySpace got very, very diverse in its offering, and didn’t really have a specialized service that users understood. So, as we broadened our service over time, I think we lost some of the core strategic functions that MySpace offered early on that delighted its customers.
F: Early on MySpace developed a reputation for being largely about music. Are you saying that got lost along the way?
MJ: No. The music component of MySpace remains very, very strong, and the music origins of MySpace are definitely part of what drove MySpace into its current strategy of social entertainment. I believe what happened in addition to music was that MySpace took on a portal strategy, where they added functions like horoscopes, weather [and other] basic traditional portal functions that aren’t natural to a social environment.
F: Of course, you’ve been with the company for about 18 months, so a lot of this happened under the regime of the founders who sold the company to News Corp. (NWS)
F: It was considered such a coup for News Corp. to have bought MySpace in 2005 . That was then. Clearly, with the company losing money, it’s become one of the sore spots for News Corp. as opposed to one of the bright spots.
MJ: Well, it’s a growth spot for News Corp. We have 130 million people that use MySpace regularly, and we’re introducing a completely new strategy, so we actually see this as a pretty massive opportunity for the business.
F: Okay. But an entity that was making money, and now is losing money.
MJ: News Corp. doesn’t break out MySpace’s financials specifically. What I can say is that we’re looking at building a very big business with MySpace, and we think the strategy we’re pursuing will actually drive it to be a large business.
F: In News Corp.’s most recent earnings report the digital division had a $156 million operating loss for the quarter.
MJ: But the digital division is comprised of a few different things in addition to MySpace.
F: Okay. So, you’ve announced that you’re going to redesign the site for the first time in a very long time.
MJ: It’s beyond a redesign. It’s actually a completely new strategy. We’re moving the strategy focus of MySpace to social entertainment. It comes with a new brand, a new logo, a new look and feel, and a complete new platform. So, we’ve more or less rebuilt the site from the ground up. The new platform provides for people to connect to all the things they love. They can find their favorite celebrities, their favorite TV shows, their favorite bands, their favorite movies. And they can build this personalized content experience specifically around entertainment.
F: Can’t I do all those things at Facebook as well?
MJ: You can do different things on MySpace because it’s specific to content. So, as you build your environment within MySpace, we’re really driving you to connect to your interests, and through those interests, we’re actually helping you connect to people. The personal experience you build on MySpace is unique to entertainment. We actually see it as a nice complement to your other social environments that you might use.
F: Okay. But on Facebook I can be involved in groups that are devoted to entertainment, for example, as well as many other things. Your hope is that I’ll come to MySpace specifically because of entertainment?
MJ: Exactly right. Being very focused on the entertainment allows us to be the best at entertainment news, video clips, celebrity information, etc. As we focus specifically around social entertainment, we believe the experience you’ll have on MySpace will really fill that need the best.
F: What’s your rough breakdown right now between the U.S. and non-U.S.?
MJ: It’s around a 50/50 breakdown of the 130 million active audience.
F: Talk about some differences in behavior on MySpace between the U.S. and the audience outside the U.S.?
MJ: Within the U.S. you have very tight networks that use MySpace, and they typically are sharing music, and movies, and videos. Outside the U.S., we have a larger audience that engages around content, but often doesn’t actually log in to MySpace.
F: Is re-launching, rebranding, re-logoing an expensive proposition?
MJ: MySpace has been working on the strategic re-launch for about eight months now. So, the team has been dedicated to it, it’s been the complete focus of the business. The marketing and advertising projects that will release in the next few months all leverage the platform and the product.
F: You’re effectively reintroducing a well known brand in a new way. Won’t that cost a lot of money?
MJ: Well, I believe for a social platform like MySpace to be successful, it needs to travel throughout basically word-of-mouth advertising.
F: How can you be certain that social media isn’t a winner take all game, that Facebook doesn’t get such scale that there’s no room for anybody else, or that there just isn’t room for that much growth for anybody else?
MJ: My belief is that media over time becomes naturally social. So when you apply the concepts of a product being social to different categories within the Web, or on mobile, you’ll find that it has very, very different experiences. So my belief is that although communications may be centralized, you’ll find that segments like entertainment can have social applied to them and be very meaningful.
F: MySpace is part of News Corp., which is a newspaper company, and a film company — a multi-faceted entertainment company. Is there any evidence that you’re able to leverage the assets of News Corp. from an entertainment perspective? On the other hand, does being part of a large multinational corporation inhibit a technology company from being cutting edge?
MJ: News Corp. is very entrepreneurial. We do work with other News Corp. groups, but we pitch those deals as we would pitch them to any other partner. News Corp. does a great job of allowing its independent businesses to really function independently, and that allows us to grow, and to work with others as needed.
F: Speaking of partnerships, a few years ago MySpace signed a famous and extremely large revenue deal with Google. You recently signed a short extension to that deal. What will happen next?
MJ: We’re looking at a variety of different search and advertising partners to continue on MySpace’s path of monetization. That really does revolve around the new product. As we roll out this new product, and we understand how advertising interacts within that environment, we’ll be selecting that right partner.
F: MySpace has always had a very young persona to it, and Facebook, obviously, had an extremely young persona to it when it started. They’ve succeeded, I would argue, in broadening that, against some initial skepticism.
MJ: Our new product is really driven against this Gen Y audience. We want to basically really program for them.
F: But older people listen to music, too, right? Why not go after that?
MJ: Realistically, I think any age is going to enjoy the new MySpace product, but I think the brand, and the advertising, and all the content that we’re bringing to the platform will be much more Gen Y focused.
F: The chief Operating Officer of News Corp., Chase Carey, made a strong statement in the company’s recent earnings release that MySpace’s losses are unacceptable and unsustainable. He also said current management isn’t responsible for them, but understands them, which begs the question: How much time have you got as the new CEO to turn that around?
MJ: News Corp. is committed to the strategy. They’re aware of the plan.
F: So, what’s a reasonable time frame for success or failure? How quickly do you need to show traction with the new plan for it to be considered a success?
MJ: There’s no specific timeline. As you roll out a large product, as MySpace is, it’s going to take almost a full month before the entire audience can use that new product. It will then take a few months for us to understand the metrics and the behaviors of how people engage with this new MySpace. So, it’s going to take a little bit of time for us to understand the shape of that usage and then we’ll basically do the appropriate planning.
[note: News Corp.’s Carey said Monday he’s open to all options for MySpace, including a sale, once the company gives its re-launch a try.]
F: Do you have an example of another brand in U.S. history that has been successfully rejuvenated that you’re paying attention to right now?
MJ: I’d say Apple (AAPL) and Nintendo are both incredible turnaround stories, relative to their brand, their products, and I think they both achieved that kind of re-emergence through focus, and through delivering incredible consumer experiences.