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News Corp to MySpace: Shape Up or Ship Out

“We’ve been clear that MySpace is a problem.”

“The current losses are not acceptable or sustainable.”

They must show improvement in “in quarters, not in years.”

News Corp. president Chase Carey spoke to investors earlier this week and everyone is talking about it. He made it clear that the 70 million drop in ad and search revenue wasn’t going to be tolerated and that without a major improvement MySpace’s days were numbered.

It’s interesting timing. Not two weeks ago, MySpace announced a major overhaul that included a redesign and a focus on entertainment and a younger demographic. The website’s one saving grace over the years has been its popularity with musicians. Back in 2005, shortly after the NewsCorp buyout, MySpace launched its own record label.

“We have marketing power reach at our fingertips,” MySpace CEO Chris DeWolfe said Thursday. He said the relationship with News Corp. could get bands it signs into movies developed by 20th Century Fox and on television shows on the Fox network.”

Their first band was called Hollywood Undead. Maybe that should have been a sign.

So here we are in 2010 and here’s Carey tapping his foot as he waits impatiently for the hordes to return to the once beautiful and powerful Oz. Will it happen? I think it could. But first MySpace has to stop trying to be Facebook. They can’t compete, but they can come back with an entirely different product that gets people excited about social media again.

If MySpace can build an interactive playground focusing on trends in movies, music and TV, they could have something. Facebook doesn’t cut it in this area and neither does iTunes’ new Ping network. Give me a spot that makes it easy to send my friends my favorite clip from a TV show and download the song that played over it and I’d come back to MySpace.

The question is, will they be able to build something new before the NewsCorp clock runs out.

What do you think? Does MySpace have a chance of regaining an audience or will it be on the auction block within a year?