Webware

Amid economic woes, stagnant growth, and a management shakeup, onetime social-networking pioneer MySpace has announced that it has cut its head count by slightly under 30 percent in what the company calls a "return to start-up culture." Well, that's a nice way to put it.

Reports had circulated that MySpace would be laying off nearly half its employees in a move that had delayed its relocation to a bigger office space in the Los Angeles area. With the layoffs, MySpace's full-time U.S. employee roster will be down to 1,000 people--which means somewhere just south of 500 jobs were cut.

MySpace said that the layoffs are evenly distributed across all U.S. divisions of the company. Since MySpace also operates a number of offices overseas, it's not yet clear how they were affected (if at all), and representatives declined comment as to whether international offices would be affected down the road. CNET News has heard rumors that there may be consolidation in some of MySpace's European offices, something that the company did late last year when it merged its Amsterdam and Berlin offices.

"Today the domestic restructure is the only info we can share," a MySpace representative said in a phone call Tuesday.

Owen Van Natta, CEO of the News Corp.-owned social site, said in a release: "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company. I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product."

Van Natta, the former chief operating officer at Facebook, was hired as CEO of MySpace late in April after a short stint at the head of start-up Project Playlist. Former CEO Chris DeWolfe had stepped down earlier that month, reportedly at the behest of Jonathan Miller, the new digital czar at News Corp. Executive shakeups at MySpace had been happening sporadically for nearly a year at that point.

MySpace's new executive lineup gives it solid entertainment street cred: Van Natta was joined by former MTV digital exec Jason Hirschhorn and former AOLer Michael Jones. Late last year, another MTV digital-media executive, Courtney Holt, joined MySpace as the head of its new MySpace Music division.

A source with knowledge of the situation said that senior management was spared Tuesday's cuts.

Launching MySpace Music, which focuses on free streaming music supported by advertising, was a return to the company's roots: once a hub for indie band promotion and community, MySpace had grown massive before Facebook began to catch up to it in international and then U.S. traffic. Partnerships with the likes of Google and a prominent endorsement of the OpenSocial developer initiative didn't help it regain traction as a networking destination.

Holt told CNET News in March that MySpace Music's traffic was "huge." But record label executives--who are partners in the MySpace Music joint venture--reported dissatisfaction with the revenue it was generating.

Last update at 11:56 a.m. PT.

Google's radio advertising business has become the newest project that didn't pass muster in Google's new financially rigorous era, and up to 40 employees will lose jobs as a result, the company said Thursday. However, the company isn't completely withdrawing from the market, saying it's begun exploring ads for streaming audio instead.

"While we've devoted substantial resources to developing these products and learned a lot along the way, we haven't had the impact we hoped for. So we have decided to exit the broadcast radio business and focus our efforts in online streaming audio," said Susan Wojcicki, Google's vice president of product management, in a blog post Thursday. "We will phase out the existing Google Audio Ads and AdSense for Audio products and plan to sell the Google Radio Automation business, the software that automates broadcast radio programming."

And cuts will come: "We hope to find other roles for the majority of the people concerned and will work to make that happen over the next couple of months. However, given that we are exiting the broadcast radio ad business and selling the Radio Automation business, we expect that up to 40 people may not be able to find other roles at Google."

Google said employees will have about two months to apply for new jobs within the company. The service itself will shut down May 31.

The search giant has more than 20,000 employees, so losing 40 isn't very many in the scheme of things. However, it's bigger than the full staff of a lot of start-ups, and the cut is notable given Google's willingness for years to tackle an immense spectrum of projects.

Google already said it's cancelling its print-ad service, which like radio is a step away from the Internet domain where Google has the home-field advantage over some rivals. The company will continue to invest in its TV ad business, though, Wojcicki said.

Digg CEO Jay Adelson on Thursday morning is announcing that the social media site is laying off a "very small" portion of its workforce, but will also be hiring a new direct sales force and head of sales to drive the company to profitability this year.

The overall job cuts at the 75-person company will be "microscopic in size," Adelson said to me, later confirming a figure of "about 10 percent." He reiterated that Digg this year is focusing on profitability and growth, and for the first time is building out its own advertising support structure, "which we've never really focused on before." Adelson posted a brief item about the news on the Digg blog.

The partnership Digg has with Microsoft to sell standard advertising units will continue. But Digg will be rolling out higher-profile advertising programs, and features on the site to support them, that his internal sales force will be pitching. He pointed to Digg Dialogg as an example of a vehicle that could be sponsored by a higher-profile advertising program.

It's a difficult time for all media companies, of course, but Adelson says that Digg has not seen any CPM erosion--the price they get for the ads on the site--and that the Microsoft is doing well for the company.

Even though Digg has "multiple years" of cash on hand for operating expenses at the current burn rate, Adelson said, it's a brutal economy today. "It's true we have cash in the bank, but getting to profitability makes more sense to us." Sounding like almost every other Web start-up CEO on the state of his business today, he continued, "If things don't get worse this year, if we get to the second or third quarter and things look good, I can bring some of that talent back in. But if we go in the other direction, that's not a burn rate we can maintain. I'd rather be in front."

The company raised new capital and doubled in size in 2008.

Adelson says Digg's engineering and core development group won't be hit by the layoffs. The cuts will come in areas "not core to our function. We'll be shifting some of that cost to a sales force."

The ax has fallen at Federated Media Publishing, the online advertising company founded by former journalist John Battelle. Seven of the company's 90 employees were laid off Friday.

The layoffs, according to a company representative, were almost exclusively on the display-advertising side of the company. Federated also creates interactive marketing campaigns, and with the display ad downturn in full effect, that's where the company has chosen to focus. Federated doesn't plan to ignore display advertising, but hope to make several hires on the marketing side.

"Given our journalistic heritage, we don't want to bury the lede: Today FM is restructuring parts of our business, and as a result, we are saying goodbye to a small number of our employees," a post by Battelle on the company blog read. "Also as a result, we are adding several positions in strategic areas where we see growth in the coming year."

In April, Federated Media raised a $50 million investment round led by Oak Venture Partners. The company serves ads on many of the Web's most popular blogs, like Boing Boing and TechCrunch, but it's had some high-profile losses over the past few years. In 2007, the company lost its display ad contract for aggregator Digg to Microsoft (though it still handles sponsorships), and tech blog network GigaOM left Federated Media for IDG last year.

Social-media pioneer LiveJournal is the latest company to announce a round of layoffs, trimming down its employee head count in its San Francisco and Moscow offices.

A statement from the company came after a rumor on gossip blog Gawker suggested that a shocking number of LiveJournal employees--20 out of 28--had been cut. LiveJournal clarified that it was "about a dozen" cuts, amounting to about a fifth of the company.

"LiveJournal Inc.'s headquarters, technical operations (and servers), legal, administration, and the customer service teams will remain in the United States," the release explained. "LiveJournal's global product development and design will now be coordinated out of its Moscow office. The pooling of resources between the U.S. and Russia will allow the company to build a stronger business model, well positioned to guarantee the long-term success of LiveJournal."

Yahoo veteran Matthew Berardo, who was hired as general manager of the service less than a year ago, was affected by the layoff.

LiveJournal was founded nearly a decade ago by OpenID creator Brad Fitzpatrick, who sold the company to blog software firm Six Apart. But that led to widespread reports of management difficulties, and late in 2007, Six Apart resold LiveJournal, phenomenally popular in Russia, to the Moscow-based software company SUP.

A report on PaidContent suggests that InterActiveCorp, the media conglomerate owned by Barry Diller, may be looking to sell off some of its smaller ad-supported content properties--effectively, tossing assets overboard to lighten the load during rough financial seas.

According to PaidContent, IAC may be "dissolving" its "programming" group, a set of ad-supported content businesses that includes CollegeHumor, 236.com (a joint venture with The Huffington Post), Very Short List, and the brand-new The Daily Beast. The restructuring reportedly involves the departure of Nick Lehman, chief operating officer of the programming group.

A CollegeHumor executive told CNET News in an e-mail that the comedy site would not be sold. IAC took a majority stake in its parent company, Connected Ventures, which also owns BustedTees and Vimeo, two years ago.

More likely? News comedy site 236 may become wholly owned by The Huffington Post, which just raised $25 million in funding. Very Short List, an e-mail newsletter, may also be up for sale.

IAC underwent a five-way split earlier this year as Diller, convinced that the unfocused nature of the conglomerate was keeping share prices down, spun off properties such as Ticketmaster and LendingTree in order to focus on online media businesses.

Blog search company Technorati announced Tuesday that it has laid off six employees and will cut salaries by 10 percent to 15 percent for the rest of its workforce, which after the layoffs, now number 45.

Responding to what he believes is a worsening economic climate, Technorati CEO Richard Jalichandra said in a blog post that deciding to lay off employees was difficult because of the "high performers who have worked long hours to get us where we are now. They're also friends, and we're very sad to see them go." He claims that Technorati needed to become a "leaner" organization to confront 2009's challenges.

Layoffs aside, Jalichandra reassured readers that Technorati is performing well and its future is bright. The layoffs, Jalichandra claims, are an effort to ensure that Technorati's hope for success becomes more likely.

"In spite of these challenging times, Technorati's prospects haven't changed, and in fact, have never been brighter," Jalichandra said. "In the past year, we've launched several very promising initiatives, and our business has grown significantly. Our overall strategy is not changing, however, the economy has changed dramatically so we're adjusting to meet it."

Technorati wouldn't say who was laid off from the company, but it did say that two of the employees who lost their jobs were executives.

For a listing of other layoffs in the tech sector, check out our Layoff Scorecard.

Revision3, the online-video production company started by Digg executives Kevin Rose and Jay Adelson, is the latest company to go through a round of layoffs. A source close to Revision3 tells us that nine people have been let go, plus a tenth who will be retained as a freelancer. Before the layoffs, Revision3 had approximately 35 employees.

Not surprisingly, news of the layoffs is all over Twitter: the first report of it appears to have come from Rocketboom founder Andrew Baron. He said he had received an e-mail from Damon Berger, senior director of creative and business development at Revision3, who said he was one of those laid off.

Blog guru Leo Laporte twittered about the layoffs several minutes later.

Revision3 posted an explanation to its blog later on Monday morning: the shows Pixel Perfect, Pop Siren, and Internet Superstar have been discontinued. The post did not say anything about how many layoffs there have been, though.

The start-up has also dropped its licensing deal with popular Web shows Epic Fu and Wine Library.

"About a week ago Revision3 let us know that despite a year of record revenue and viewership, they are feeling the effects of the economic crunch and need to make some urgent and tough decisions," a post on Epic Fu's production company's blog read. "As of the end of 2008, Revision3 will no longer be the Web licensing partner for Epic Fu, and we'll be leaving their network of shows. We wish Revision3 luck in the coming months and remain a fan and supporter of their shows."

In light of the economic downturn and the end of its Revision3 contract, Epic Fu production company Smashface has opted to make some layoffs as well, letting three employees go.

The San Francisco-based Revision3 has enjoyed most of its popularity among the Twitter-friendly geek set, signing deals with blogger personalities like wine critic Gary Vaynerchuk and former CNETer Veronica Belmont.

Lifestyle programming director Sarah Lane, a Revision3 mainstay, wrote on her blog on Monday afternoon that she had been laid off as well.

UPDATE: We have heard from a source close to Revision3 that in addition to Lane and Berger, Revision3 has laid off director of comedy programming and Internet Superstar host Martin Sargent and six others. Diggnation producer Glenn McElhose has been laid off as well, but will remain at Revision3 as a freelancer.

Last updated at 3:04 p.m. PDT.

Jason Calacanis, CEO of Mahalo, a human-powered search engine, announced today that he was forced to layoff 10 percent of his staff (about five or six people) amid a "challenging economic environment" that will require the company to cut costs.

"Although we've got a significant amount of cash on hand, and the business is ahead of schedule in terms of traffic, we're fairly certain that the advertising climate for the next two years will be severely depressed," Calacanis wrote in a blog post. "To ignore this obvious fact would be irresponsible.

"We've laid off just under 10 percent of our full-time staff, cut our overhead by doing smart things like renting desks, and reorganized our editorial department to focus on freelance positions over in-house editors. The net result of the effort is we are giving Mahalo another year of "dry power" (or runway) to complete our mission," he added.

Calacanis told CNET in an e-mail that the layoffs are "precautionary" and his decision to rearrange the editorial department by relying more on freelancers was inspired by his decision to follow "the Weblogs, Inc. model" of paying freelancers based on output while he was the CEO of that company.

"[The layoffs] give us four years of runway (which might be way too conservative), but I'd rather be a little conservative now and expand later when [the] ad market comes back," he said in an e-mail.

Mahalo, which tries to provide better search results on major topics thanks to editorial input, relies heavily on advertising as a source of revenue. But as Calacanis pointed out, the layoffs allow Mahalo to operate through 2012 even if the company couldn't incur any advertising revenue during that time period.