• by Erik Sass , Staff Writer @eriksass1, January 4, 2011

Just a few months after revealing a mostly beside-the-point redesign and re-launch as "My___," MySpace is preparing to take another important step on its road to reinvention, according to a report from CNBC: firing half its workforce. That would mean cutting about 550 of its roughly 1,100 employees. The Wall Street Journal, also owned by Rupert Murdoch's News Corp., also reported that the once-dominant social network is planning a large but unspecified number of cuts.

No matter how you slice it, it's hard to put a happy face on mass layoffs. But the cuts were probably inevitable, following ominous statements in November from News Corp. executives warning that MySpace had to become profitable soon, or face more rigorous measures. These included cuts and a possible sale of the network -- steps which certainly aren't mutually exclusive (the layoffs could be aimed at tidying up the bottom line to attract suitors). Not coincidentally, CNBC also reported that News Corp. may sell MySpace by the middle of this year, although it's not currently in talks with potential buyers.

As I noted in a previous column, all this would seem to call into question whether buying MySpace was actually worth it for ol' R-Murda (that's his hip-hop hook, for those who don't know), who bought the site for $580 million in July 2005. Fox Interactive Media doesn't release separate figures for MySpace, but I have seen revenue estimates of $180 million in 2006, $400 million in 2007, $600 million in 2008, $500 million in 2009, and $385 million in 2010. That adds up to about $2 billion in five years. Which sounds great -- until you realize the part of Fox Interactive Media which includes MySpace (the enigmatic "Other" in its financial results) shows losses of $150 million in fiscal 2006, $193 million in 2007, one profitable year to the tune of $42 million in 2008 -- then another loss of $212 million in 2009, and $575 million in fiscal 2010. So, about $1 billion in losses over five years: maybe not so great, after all.

For what it's worth, someone out there is still using MySpace -- albeit fewer "someones" than before. From about 75.7 million unique U.S. visitors in November 2008, the site dropped to about 63.6 million in November 2009, then 54.5 million in November 2010. That compares with Facebook, which grew from 47.5 million to 151.7 million unique visitors in the U.S. over the same period.

While you can't put a positive spin on $1 billion in losses over five years, it's worth noting that MySpace's total monthly unique visitors in November were in the same ballpark as the Fox News average monthly audience in 2010 (85.7 million) -- nothing to sneeze at, in terms of reach.