MySpace fires 500 employees

Which is a large number, considering the fact that MySpace.com only has 1500 (now 1000) people employed. Has the financial crisis finally started chewing on Web 2.0?

MySpace had been the undisputed biggest social networking application for several years, untill it's popularity was surpassed both worldwide and in the US by Facebook this year. As the popularity of Twitter and Facebook keeps growing at a stunning pace, MySpace's growth has stagnated for some time now. Income derived from advertising has been plummeting as a consequence.

It's hard to tell whether this mass dismissal was caused simply by growing competition in the social networking sector, or should be interpreted as a indirect consequence of the economic situtation in the US at the moment.

read more at wired.com:

http://www.wired.com/epicenter/2009/06/myspace-lays-off-30-braces-for-comeback-battle/