• San Jose Mercury News, Monday, November 6, 2006 12:30 PM

Fall has not been good to Fox Interactive Media, the News Corp. unit that oversees Fox's Web sites, including MySpace. Last week, Mark Jung, the company's COO, quietly stepped aside after just nine months on the job.

However, Jung's pedigree didn't really have anything to do with MySpace: he was co-founder of IGN Entertainment, a Web portal for 18-34 males covering entertainment and video games. The sale of his company was tied-in with the $650 million deal that brought MySpace to News Corp. Ross Levinsohn, FIM's CEO, said Jung is "an entrepreneur at heart," who left the company for "personal reasons," ostensibly to work on a new startup. Levinsohn says investors shouldn't take this as a sign of decline because "we have tremendous bench strength."

OK, but take this as a sign of decline: MySpace actually lost users between August and September. To be fair, it was a modest 2 million uniques--but up until that point, MySpace's growth rate was amazing. Greg Sterling, a digital media analyst, said "double- or triple-digit growth is hard to maintain, but some of the things that propelled MySpace to such enormous popularity may be changing. MySpace has now morphed into more of a portal. And there's more competition."

Levinsohn counters by saying that today, MySpace announced a new deal to move into the Japanese market. FIM hopes it can be a crossover success, which is far from a foregone conclusion.

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