I sat down with MySpace CEO Owen Van Natta at the World Economic Forum in Davos, Switzerland earlier this week to talk about his first eight months on the job. This is one of Owen’s first video interviews since taking the job last April.
We talk about Van Natta’s vision for the once-mighty MySpace. The site was at one time the worlds largest social network and had more page views than any other U.S. website. But in the last couple of years it has been eclipsed by Facebook’s stunning growth.
Still, Van Natta and team have a plan. The MySpace of the future will be all about the social experience around content, and the company’s strong offerings in music and music videos through MySpace Music will be the cornerstone of that effort. From the interview:
I think we have a unique value proposition for consumers that is about being the place where people socialize around content, and by socialize, I mean the tag line of, you know, discover and share and showcase content. It’s where you learn about content both through your friends and, you know, sometimes it’s more important that the people that you don’t have any connections to in the real world. And one of the big differentiators for MySpace is the fact that we have an open social graph. People expect to connect to people they don’t have connection to in the real world but has similar interests with. And so, it’s a great way to do discovery. It’s a lot of the way discovery happens in the real world. And now the social web is just simply enabling that to happen more increasingly online.
Van Natta has made two acquisitions since joining, iLike and iMeem, both in the music space. And that iLike deal got MySpace Music onto Google search, driving a lot of traffic and attention to the service.
We discuss both acquisitions in the interview.
Van Natta also talks about MySpace revenue, particularly the soon to terminate Google search deal.
Michael Arrington: I’m here with Owen Van Natta, the CEO of MySpace. Owen, you’ve been CEO for eight months now?.
Mr. OWEN VAN NATTA (CEO, MySpace): Eight months. About eight months now.
Michael Arrington: We’re sitting down at the luxurious Club Hotel in Davos, Switzerland. You’re at the World Economic Forum. This has become a bit of a tradition for me to interview CEOs here. This is the internet ghetto. This is where they put all the internet CEOs. It’s not like the best hotel in the world. As you found out, there’s no shampoo.
Mr. VAN NATTA: (laughs) No shampoo. And they’ve got beds in the closets.
Michael Arrington: Murphy beds. Yes.
Mr. VAN NATTA: But they also have a great sound track here, so you could hear it matches the decor. It’s very ’70s, very (unintelligible).
Michael Arrington: So, I have a few minutes with you. What I want to start with is, tell me what MySpace is today.
Mr. VAN NATTA: MySpace is a place to share and it’s a place to discover, share and showcase content. That’s what people are doing on MySpace today and that’s what we’re focused on, continuing to provide to people.
Michael Arrington: So, over the last eight months, what have you fixed, what have you pushed forward on, what have you cut? What is your job there?
Mr. VAN NATTA: Well, we’ve – I’m very focused on being a user center’s company. And that means starting with the product, making sure that we have a product plan that matches the mission statement of discover, share and showcase content. We’re focused on the music category. We’re focused on film and television. We’re focused on games. That’s what people are engaged with today on the site. Once we – you start a product strategy, you need to make sure you have the right team. We’ve built a entirely new management team of MySpace. I’m really excited about some of the talent that we’ve brought on board. Now, it’s all starting to be built throughout the entire company, and obviously, you have to have a great technical platform in order to be able to compete in the internet space. And we’ve been doing a lot of work to position ourselves to deliver on the promise of our type of platform. You know, we’re doing a lot of things to improve the experience like decrease page download times and we’re starting to realize some of those games already. I’m excited about our progress so far.
Michael Arrington: Your engineers are mostly in L.A. and San Francisco, right? Or entirely in L.A. and San Francisco?
Mr. VAN NATTA: We actually have a large engineering group in – well, reasonably large engineering group in Seattle.
Michael Arrington: OK. And have you hired a lot of engineers since you’ve come on board? Or has it been mostly keeping the ones that you like or how – what has that been like?
Mr. VAN NATTA: No, we’re constantly bringing new engineering talent at all levels of the organization. We have a new CTO, got an Alex Maghen who has a great background dealing with large scale systems. And I think we have a lot of great news to come in terms of tech (unintelligible) coming in. It’s a big area of focus for us.
Michael Arrington: Before you came on board – in fact, I talked to DeWolfe, your predecessor, here a year ago, and there was a lot of focus on the past before you and your team joined about competition, and particularly Facebook, and how you stacked up against Facebook at different times. I haven’t heard a lot of that from the team, not a lot of focus on the competition, more about what you are and what you’re doing to push forward. In fact, you’ve integrated with, I think, Twitter in some ways, right?
Mr. VAN NATTA: Yes.
Michael Arrington: You’ve done a small integration with Facebook Connect. Are we going to see more of that? How can you use some of the companies out there to make your product better?
Mr. VAN NATTA: Well, a big part of our strategy is to be – is to really embrace openness and let people engage with content where it is that they want to engage with it. So, you know, one of the things that we did early on was we acquired a company called I Like That. I know you’re aware of. It has a…
Michael Arrington: Yeah, just a month before they were integrated with Google Search.
Mr. VAN NATTA: That’s right.
Michael Arrington: Did you know about that when you bought them? Did you know that that deal is going to happen?
Mr. VAN NATTA: You know, those things are always in the works but it wasn’t a done deal. But you know…
Michael Arrington: The timing sort of worked out well, looked like you got a really good deal on that company as well.
Mr. VAN NATTA: Well, I think, you know, the timing of the Google partnership is one that we’re excited about. You know, we’ve even extended, so since then, we announced that we’re going to be part of their real time search initiative and, you know, we’re excited to see what type of collaboration that brings as well.
Michael Arrington: Well, since we’re on the topic of Google, I’ll jump ahead. You have a search deal with them that signed a couple of years ago before you joined, and in, I think, June of next year – middle of next year, the end of your fiscal year next year, it ends, at least the last for a public statement on that. Are you renegotiating that or you think you’re working with another partner? It’s nearly $900 million deal over three years. It’s a substantial amount of revenue. Where do you stand with that?
Mr. VAN NATTA: All those types of partnerships always need to evolve. You know, we’ve continued to evolve the business and building that in a way where we just – we don’t have any dependency on – we don’t have dependency on any one revenue stream. We’re always open to new partnership. We’ll continue to extend our partnership with Google in the areas of music search as well as real time search(ph). So, you know, that continues to be a great relationship that we’re excited about. And we’re going to be looking at lots of different options as we go forward. We’re really pushing on innovation. You know, we’re really in the midst of remaking MySpace into the place where you discover, share and showcase content and partnerships are going to be a big part of that.
Michael Arrington: If you talk about content, and this has been something you and your team is – have talked about almost since day one. Obviously, you have the music property with is great. It’s been around since over a year now. You guys do a lot with trailers. I see trailers all the time. You have lots of video content on the site. Is that what we should be thinking of? Or you’re thinking of more of like a Hulu type of thing or are you actually pulling an actual TV content, like what do you mean by content? And there are games as well. Are these games that you’ll publish? Will you acquire companies? Will you pull in more third party Flash games? Is there a way we should – as a press, should be thinking about what you mean by content?
Mr. VAN NATTA: On the Music Space, having the relationships that we do and the joint venture we do with the major record labels, the publisher, all the independent record labels, give us the ability to have a music experience that really is unparalleled.
Michael Arrington: Music videos, music streaming…
Mr. VAN NATTA: All of it in one location and very, very social which we think is really the foundation for discovering (unintelligible).
Michael Arrington: What about mobile? We see a mobile music initiative at some point?
Mr. VAN NATTA: We continue to look at mobile. It’s a big part of the way that people are interacting with the site today. We got a tonic(ph) growth in mobile, and it’s a big area of focus for us, and I’m really hopeful that we’re going to continue to evolve and innovate and that’s (unintelligible)…
Michael Arrington: And maybe see streaming music and that kind of thing in the future.
Mr. VAN NATTA: I think all those things are the things that users are increasingly wanting and we want to serve those user needs, especially as it relates to discovery around music because that’s one of the underserved areas in the market that we’re uniquely positioned to deliver for consumers.
Michael Arrington: What about TV and films? I mean, actual films and things like that. Is that something that you think YouTube and Hulu will dominate or is that a place that you’ll play or do you know yet?
Mr. VAN NATTA: We consider YouTube and Hulu to be partners today and we have their content integrated all throughout the site. We have over 400 partnerships with different content producers and content creators. That’s going to continue to be an area of focus for us. We host our own music videos, that was something we launched, as you know, last year. So, those models will continue to evolve but it’s really going to be about partnership. We’re building a platform where we want users to come and engage with that content in a highly social environment and that’s going to continue to be our focus in terms of providing great user experience.
Michael Arrington: OK. Do you think – and I know this is a question you’ve been asked many times. But, do you think we’ll see a for Facebook Connect integration? Is it something you’re still considering, something you’re deciding on?
Mr. VAN NATTA: We did a very small Facebook Connect…
Michael Arrington: The European site.
Mr. VAN NATTA: Out of our UK office. Again, I think embracing openness means looking at it everywhere. And, you know, we’re certainly looking at different ways that users want to be able to engage with the content and we’re pretty much open to figuring out the right way to make that available for users, where it is that they want it. 7.45
Michael Arrington: OK. MySpace has always been a bit behind maybe on design and technology. And not your team’s fault, but what are your plans to remedy that? Or do you disagree with this statement?
Mr. VAN NATTA: You know, I think usability and user experience and design are critical areas if you’re going to be a player in the consumer web. One of the first hires that we made was someone that had a user experience for (unintelligible) extensive experience, building great user experiences from some of the top sites out there. It’s something that…
Michael Arrington: Who was that?
Mr. VAN NATTA: That really focused on – she’s a woman named Katie Geminder.
Michael Arrington: OK.
Mr. VAN NATTA: She’s got experience at Amazon and Apple and Facebook.
Michael Arrington: Does she report to Jason?
Mr. VAN NATTA: She does.
Michael Arrington: OK.
Mr. VAN NATTA: She – and so, it’s an area – it’s a big area focused for us. It’s something that we’ve actually been staffing up quite a bit. We’re starting to build a really solid team there. We need to have a technical platform that really enables us to have a great user experience and we’re focused on building that out too.
Michael Arrington: How far away are you from that do you think?
Mr. VAN NATTA: You know, it’s an interactive(ph) process. It’s not something that you can do a big atomic launch around. We have a very large site with a large number of users and we really want to bring them along and have them show us through exactly how it is that they’re responding, give us a feedback exactly what the best user experience is. So, you’re going to see that continue to evolve. We’ve done a number of things in that space already where we (unintelligible) set a number of categories and number of areas on the site that we just didn’t think we’re adding value for users, that usually we’re showing through their actions weren’t the things that they were coming to MySpace to do, things like weather and jobs and classifieds, horoscopes. I know you found out that horoscopes are gone.
Michael Arrington: I was – that was a sad day.
Mr. VAN NATTA: But, you know, that’s something that we’re continuing to focus on and we want to be excellent in usability and design. We were building a really strong competence(ph) there.
Michael Arrington: You know, Facebook talks a lot about how they’re the pipes around social. You guys talk a lot about you’re the content. It seems to be that the one word you use a lot is content and social experience around content. Is that the right way to think about MySpace?
Mr. VAN NATTA: I think we have a unique value proposition for consumers that is about being the place where people socialize around content, and by socialize, I mean the tag line of, you know, discover and share and showcase content. It’s where you learn about content both through your friends and, you know, sometimes it’s more important that the people that you don’t have any connections to in the real world. And one of the big differentiators for MySpace is the fact that we have an open social graph. People expect to connect to people they don’t have connection to in the real world but has similar interests with. And so, it’s a great way to do discovery. It’s a lot of the way discovery happens in the real world. And now the social web is just simply enabling that to happen more increasingly online.
Michael Arrington: So, you were always a startup guy. I mean, even in Amazon, you broke out and started a line for them. You were with Facebook when they were a very small playlist. You’re now at a big company within a big company. Looking back over the last eight months, is the job what you thought it would be when you took it? Was it different than you thought it would be?
Mr. VAN NATTA: I think this is a unique situation. I certainly came in expecting that this is going to be a lot of work but what I am excited about everyday and what gets me fired up and my team fired up everyday is that we have an incredible asset base and we have a really strong user value proposition. It’s something that users are telling us every single day with their time that they really value highly. And as we continue to make improvements, we’re seeing increased engagement around the areas that we are focused on, the content areas that we just talked about. So, you know, look, building these companies is a huge challenge, but I love building teams, I love being part of a team, and I’m really excited about what we have in front of us and really also pleased with the progress we’ve made so far.
Michael Arrington: All right. Thanks very much. Oh, one other thing. You just hired a new chief revenue officer.
Mr. VAN NATTA: We did. Nada Stirratt.
Michael Arrington: Any shifts on your revenue strategy now based on that?
Mr. VAN NATTA: Well, one of the things that we’re seeing in terms of the market is, you know, the economic downturn, as I’ve talked with a lot of CEOs and marketers, you know, brand managers, I think the economic downturn caused a lot of these companies to really reevaluate their advertising strategy and what you increasingly see is more people’s time spent online but fewer brand always being able to be spent online. And one of the areas where I think we’ve been super innovative and where I think we have a strong competency is in the integrated marketing area, some of the things that we do with movie studios or on movie launches or record releases. You know, we released over 200 records in the last 12 months for bands, and really to promote those heavily to millions and millions of people in a very integrated way is super unique. When we talk to users about it, we look at users’ behavior, what we’re finding is they really view that content as valuable as they would view professionally produced content or content that isn’t necessarily advertising content. And, you know, that is what we think is the big opportunity that could bring a lot more brand always on to the web and that’s what we’re working on with our advertising partners on today. So, I’m excited about that. I think it is new in that as more brand always go online, people are going to want those types of experiences and I think we’re really continuing to lead the market in terms of that type of integrated marketing.
Michael Arrington: OK. Thanks very much for your time.
Mr. VAN NATTA: Yeah. Thanks a lot.