• TechCrunch et al. , Tuesday, August 24, 2010 1:19 PM

Big changes are afoot at News Corp.'s troubled digital unit. It was revealed Monday that Adam Bain, who ran the company's Fox Audience Network, was leaving for Twitter, where he'll be spearheading its burgeoning ad revenue efforts. In turn, News Corp. announced (arguably counterintuitive) plans to integrate FAN's team and technology with MySpace.

"Bain's organization has been a bright spot in an otherwise dismal group of digital products at News Corp.," writes TechCrunch. "The company's self service ads are generating hundreds of millions of dollars annually, we've heard."

"It is clear the company is scrambling to shift strategy," writes BoomTown's Kara Swisher. "News Corp. had been working on a plan for more than a year to spin off FAN and sell a piece of it to private equity investors, in part to hold onto Bain. Now, it will go spinning back to MySpace, its principal source of ad inventory."

As Marketing Magazine points out: "Earlier this month, News Corp revealed that the Digital Media Group, the division that houses MySpace, had seen losses for the quarter increase, from $136m in 2009, to $174m," adding, "It blamed the losses on lower search and ad revenues at MySpace."

In a memo to employees, News Corp. digital head Jon Miller addresses the spin-off discussions, which is largely believed to have failed principally due to issues over internal revenue share with MySpace. "By aligning the FAN platform directly with MySpace, we will be able to utilize its services to further drive MySpace's revenue efforts and to play a key part of the site's planned re-launch later this year."

"That essentially reverses the decision News Corp. made two years ago to spin out what currently makes FAN into a separate unit under Bain," notes paidContent.

Filed under "subtext," paidContent adds: "News Corp. couldn't make a private-equity deal it liked and folding FAN into MySpace was the next-best option. Would Bain have stayed for a spin off or a PE deal? Possibly but it's easy to see why Twitter -- an attractive option -- would be even more so with merging FAN into MySpace on the table."

Meanwhile, "Here's something for individuals who have expressed concern about Twitter's underwhelming financial achievements," writes WebProNews.

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