What's former MySpace CEO Chris DeWolfe up to these days? He wants to be the next big name in the social-gaming craze, we hear.
In late July, TechCrunch floated a report that DeWolfe was hitting up big private equity outlets to amass cash, at least $100 million, for a new venture that would involve "a roll-up of an Internet industry vertical," but TechCrunch didn't specify what that sector was. Three months prior, DeWolfe had been ousted from the troubled MySpace and replaced by former Facebook executive Owen Van Natta.
Former MySpace CEO Chris DeWolfe
(Credit: Michelle Meyers/CNET)Now, several well-placed sources have told CNET News that DeWolfe intends to make a move in social gaming, a red-hot space currently dominated by the Mark Pincus-headed Zynga, and that his "roll-up" plans involve buying up a number of smaller social gaming companies so that he and Pincus can go directly head-to-head.
Multiple sources have indicated that DeWolfe is working on this new venture with Aber Whitcomb, who left his role as the News Corp.-owned MySpace's chief technology officer in late September.
We don't know what kind of progress DeWolfe, who did not reply to a request for comment, has made in securing that private equity money he was reported to be hunting for this summer. We don't know what the company's name will be--if he's settled on one yet. Nor do we know which smaller companies he wants to agglomerate.
But social games are on the brains of multiple ex-MySpace bigwigs, who were able to witness from the front lines the explosion of the industry when game developers started tapping into the viral channels on big social networks. Another MySpace executive, Jason Oberfest, left the company after just over a year to join social gaming start-up Ngmoco.
One source said that Ngmoco's valuation may already be too high for DeWolfe to consider it for his roll-up plans. Rather, DeWolfe is likely looking at very small gaming companies run by a handful of stellar developers but that lack the legal, business development, and dealmaking resources to make any kind of a dent in the current social-gaming market. He also may be looking at companies that had some initial buzz but have since seen their growth plateau or drop off.
We hear that in the months before DeWolfe's departure from MySpace, there was a lot of talk of gaming as the social site, rapidly losing ground to Facebook, attempted to refocus itself as an entertainment destination. When DeWolfe was in charge, MySpace inked a deal with casual-games maker Oberon to power a gaming platform, but that deal is no longer in place. (We've contacted Oberon for comment.)
Now, under the direction of Van Natta and several former MTV execs like Courtney Holt and Jason Hirschhorn, MySpace's "entertainment" direction is much more focused on music, and gaming has taken a back burner for the time being even though there are some hugely popular games on MySpace's developer platform.
Things couldn't be more different in the social-media industry at large, where gaming is currently front and center. While there was early on a close rivalry between two companies, SGN and Zynga, the far and away leader right now is Zynga--which is pulling in between $100 and $250 million in revenues depending on which industry blog you read, and spends tens of millions of dollars each year just buying up Facebook ads for marketing.
A few companies, like Playfish and Playdom, have also grown big (though still smaller than Zynga), and there are persistent rumors that one of them may be sold to an established gaming-industry player like Electronic Arts.
Most other companies in the space are easily several orders of magnitude smaller. Trying to make inroads when there's already a clear, formidable leader is difficult, and the economic climate means the private equity sector might be skeptical about handing a blank check to someone because he happens to have CEO experience.
What we have heard, though, is that DeWolfe already has someone to model himself on: Rupert Murdoch, the News Corp. CEO whom DeWolfe was reportedly very close to during his tenure at MySpace. With a roll-up of acquisitions, he would plan to do for the gaming industry what Murdoch did for newspapers: pluck them up across the industry, and build an empire.
Ambitious, yes.
SAN FRANCISCO--Warner Music Group CEO Edgar Bronfman Jr. thinks there is still a big place in the world for much-maligned major record labels.
"The value that we have is both on the editorial side, and on the marketing and promotion side," Bronfman said in a panel at the Web 2.0 Summit on Thursday afternoon. "Those channels are getting harder, not easier." In other words, it was an argument very similar to the one that newspapers and magazines have made in justifying their place in an industry that's getting flooded by scrappy bloggers--big music labels provide the quality and experience.
Even in the face of In Rainbows, the label-ditching, revolutionary effort from Radiohead, he said he hasn't changed his mind. "There will be different models (as opposed to labels, particularly for artists or bands who have built up a long and distinguished career, whose products don't necessarily need marketing or promotion, whose editorial is going to go out unfettered, but there are very, very few of those," Bronfman insisted. "It's getting harder to build a multiyear, certainly a multidecade career, than ever before."
Bronfman shared the stage with moderator and conference host John Battelle, and co-panelist Chris DeWolfe, co-founder and CEO of MySpace. Bronfman's Warner Music Group, along with each of the other major labels, has taken a financial stake in MySpace Music, the News Corp.-owned social network's ambitious retail and streaming hub.
MySpace Music, a sponsor of the conference, distributed free CDs to attendees subtitled "The Last CD You Will Ever Get."
DeWolfe, notably less loquacious than Bronfman on the panel, said that there have already been 80 million playlists created with MySpace Music and that more than 5 million bands are on the social network. Big brand advertisers, like Toyota and McDonalds, are on board. "The obvious yardstick, long-term, for success, is profitability," DeWolfe said. "We started this business just like we started MySpace, to become profitable very quickly."
He said that MySpace Music intends to be "a full 360 model," with "download revenue streams, ringtone revenue streams, tickets, (and) merchandise."
Bronfman said that Warner Music Group is also adopting a "360" strategy in the face of a need to adopt more solid revenue streams. "Every new artist we sign, we sign now with rights in all their revenue streams: ticketing, touring, merchandising, sponsorship," Bronfman said. "We're only signing artists that way and we now have over a third of our current roster signed to 360 rights."
"360" deals rose to fame last year at Warner's expense--Madonna left the label to adopt a 360 contract with concert promoter Live Nation.
Battelle, a seasoned devil's advocate, repeatedly prodded the two into talking about Apple's iTunes, which remains the overwhelming frontrunner in digital music. Both Bronfman and DeWolfe spoke about it with a mix of reverence and dismissal.
"Apple's done a phenomenal job," Bronfman said when Battelle asked him to provide his honest opinion of the Steve Jobs-helmed company. "It's true, it's really true, what is remarkable and why you have to give them so much credit is (that) no one has managed to pull it off. No one has been able to come up with a sexy device that consumers want, that has an interface that is seamless, that hooks up with a service that gives them the content they wanted."
"I don't really think iTunes has ever been about community," DeWolfe said when asked if he was concerned about it as a competitor. "I think they're focused on selling devices, and that's why I don't think they're competitive to us."
Early on, Battelle attempted to push out some details about the widespread reports that MTV executive Courtney Holt would be joining MySpace as the head of MySpace Music. Neither DeWolfe nor Bronfman would cough anything up.
"It's actually been a difficult position to fill because there's so many variables...we're looking for someone that loves music, understands music, has been in the music industry but understands technology and understands user experience," DeWolfe said. He said they interviewed about 40 people for the job. "We've only made one offer, and we're very confident that we'll be able to make an announcement in the near future."
DeWolfe (in the gray jacket) and Hilton (in the pink dress) leaving a club in L.A. together.
(Credit: X17.com/TechCrunch)It's not the sort of TechCrunch post you see every day: the Valley blog reported on Friday night that Chris DeWolfe, president of News Corp.'s MySpace, is dating ubiquitous heiress Paris Hilton. It's been going on for a few weeks, editor Michael Arrington wrote, adding that he was tipped off to it when he saw the two together in a video clip from paparazzi site X17.
The gossip column of the New York Post has also mentioned offhand that Hilton has been spotted at parties in a house that DeWolfe has rented in Southampton, N.Y. (That's an upscale summer party town on Long Island, for those of you unfamiliar with mid-Atlantic geography.)
DeWolfe, 42, is married but going through a separation process, according to TechCrunch. Hilton, 27, ostensibly still has a boyfriend, but really, who the heck knows?
Maybe this is what happens after Paris Hilton articulates her proposed energy policy via Web video and receives a resoundingly positive response: she stops dating Greek shipping heirs, B-list musicians, and reality show stars, opting instead for digital-media executives.
It also might be a publicity stunt, a sort of way for DeWolfe to make a statement about MySpace's identity. I mean, could you ever see Mark Zuckerberg doing something like this? TMZ.com once hounded the young Facebook founder as he walked out of a chic restaurant in L.A. with a cute date. In fact, she was his girlfriend of several years; all the pair was willing to do for the cameras was laugh for a few minutes and then walk away.
From left to right: Chris DeWolfe, Rupert Murdoch, John Battelle
(Credit: Rafe Needleman/CNET Networks)Recently, rumors have been flying over whether or not MySpace would use this week's Web 2.0 Summit in San Francisco as a venue for announcing a developer platform akin to Facebook's. Well, now we have a final answer: sort of.
MySpace CEO Chris DeWolfe and News Corp. chairman Rupert Murdoch took the stage at Web 2.0 and confirmed that the company is working on a platform that will launch "within a couple of months." But when no date's given, expect delays: considering how long we ultimately waited for Windows Vista (and now, Apple's OS X Leopard) this could mean the MySpace platform is even further off than we think. And the company did say that it won't be open to all users immediately, with a "sandbox" of one or two million beta testers preceding its full launch.
In the meantime, the company will be creating a central directory of embeddable HTML widgets, and the site's privacy controls will be growing more extensive.
The whole announcement is interesting, considering that over the past few months MySpace has been announcing original programming, hosting concert tours and partnering with record labels, making some observers (like this one) wonder whether the social network was veering away from the Facebook model and would be diving into the role of a pop-culture hub--which former leader MTV, with its newfound penchant for reality shows about rich kids, has largely vacated.
But with a somewhat premature announcement about a developer platform, MySpace has made it clear that while the site enjoys a traffic and membership advantage over Facebook, it's still following in its fast-growing rival's footsteps when it comes to technology.
Facebook, meanwhile, was represented at the Web 2.0 Conference by CEO Mark Zuckerberg, whose conversation with event organizer John Battelle of Federated Media kicked off the summit. Zuckerberg, notorious for ducking questions, said that an initial public offering is "years off." In other news, its massive financing round is under way and near completion.
And having extra investor cash is particularly important for Facebook--a report from the Silicon Alley Insider highlighted an eyebrow-raising Zuckerberg soundbite of "we don't focus on optimizing the revenue." Ouch. Luckily, the 23-year-old CEO also said that an improved advertising system is on its way.
TechCrunch's Erick Schonfeld commented that "Zuckerberg has already mastered the technique of saying nothing, while still hinting at the endless possibilities before him."
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