MySpace's Dwindling Traffic Looks Even Worse From the Inside

These are not the best of days for MySpace -- and things may be even worse than they seem. Parent company News Corp. (NWS) recently hit the panic button, replacing CEO Owen Van Natta, who had only been on the job for eight months, with a pair of co-presidents.

Some observers attributed the ouster to friction between Van Natta and Jon Miller, News Corp.'s head of digital operations. But one thing that couldn't have helped was internal traffic numbers that are far more dismal than rosier figures the company likes to cite publicly.

Shrinking MySpace Users

A glimpse at the "Executive Dashboard" that MySpace executives use internally to track the site's performance shows a number of distressing trends, according to a screen-grab of the tool provided by a MySpace source. Above all, the number of "Active Users" is considerably smaller than the 100 million–plus cited in the site's online press kit. How much smaller, you ask? For the 30 days ending Feb. 19, it was only 18 million, a 6% decline from the previous 30 days. And the rate of decline only seems to be accelerating: The number of new unique users shrank 11%.

Asked about the discrepancy between the internal numbers and the ones in the press kit, which come from the measurement firm ComScore, a MySpace representative said she could only confirm the validity of the ComScore numbers. She added that the site's unique user total -- again, as measured by ComScore -- grew for the second month in a row in January, and hit its highest level since last May.

But the overall trend has indisputably been downward -- a costly drop for News Corp., which has a $900 million deal with Google (GOOG) under which the search giant handles all the search and text-based advertising for Fox Interactive Media, the unit that houses MySpace. In November, News Corp. said that failure to meet traffic guarantees would cost the company $100 million.