• Fortune, Friday, March 6, 2009 11:31 AM

Fortune's Jessi Hempel takes a long look at MySpace, the social networking giant that was very much the Web media darling when News Corp. scooped it up for about $580 million in 2005. But now that the company's traffic is leveling out, top talent is starting to leave, and the recession is also taking its toll. An unnamed MySpace exec told Hempel that ad sales actually dipped in January and February. That disappointing news comes on the back of a disappointing 2008, as analysts pegged the social network's full-year revenue at $600 million, far short of the $1 billion target set by parent News Corp.

Meanwhile, rival Facebook continues its stellar growth. The global leader in social networking now has more than 57 million U.S. visitors, up 41% from last year. Worldwide, Facebook, has nearly twice as many visitors as Rupert Murdoch's site, with 236 million compared to 126 million for MySpace, according to comScore.

It's not as if MySpace is failing, however. Hempel notes that among social nets, MySpace is the only site to come up with a business model that earns substantial revenue. And according to Marketing President Jeff Berman, ad sales for March are looking "much, much better." Even so, the company is starting to lose some top talent. Earlier this week, COO Amit Kapur announced he was leaving the company to start a new venture-and he's taking two MySpace SVPs with him, Jim Benedetto and Steve Pearman.

Read the whole story at Fortune »