MySpace, the online social network (can we still call it that now that it has ducked out of the Facebook/Twitter competition?), appears to be pursuing what I’ll call the “two-pronged news strategy.” You get used to it when you cover media and technology. For those of you who don’t enjoy this privilege, it goes like this:

• Pick a news outlet that you like and whisper things to them about what you’re doing. It doesn’t have to be interesting, it just has to be exclusive. If you’re in public relations, you don’t even have to know that someone in your company is doing this. It works well for you.
• Let the rest of the press read the story and bombard your telephone and e-mail with messages demanding to know if it’s true. Score a big hit on the news cycle. Because you either decline to comment or only want to talk “on background,” it heightens the air of mystery — and newsworthiness.
• The official announcement of the news, which will always resemble 90 percent or more of what you read in the first round of anonymously sourced stories, will get just as much attention as that first round. It’s a 2-for-1 deal that is irresistible to many companies.

I don’t know that MySpace is doing this, and wouldn’t be able to confirm it if I asked. It could just be that the reporters who get the breaking news have great sources and the reporter asked smart questions that would yield good answers. I’ll let you judge.

The first example comes from Kara Swisher, tech blogger at AllThingsD, which is MySpace’s cousin in the News Corp family. She reports:

Microsoft’s MSN is in preliminary talks with MySpace about using the social networking site’s music service, MySpace Music, to help power music offerings on the giant portal. …

Sources said Microsoft execs don’t think they can do as good a job as MySpace is doing and don’t see the point in striking needed but complex deals with music labels, which the News Corp. (NWS) property already has.

MySpace, Swisher adds, would get a “gusher” of traffic. I asked MySpace whether we could talk about this. From spokeswoman: “Off the record I can’t comment.” OK.

The second example is this story in The Telegraph from Monday:

Facebook and MySpace are in talks about sharing content across both sites, according to senior figures at the two companies. The move could potentially see MySpace music and video footage being shared on Facebook via its Connect platform, which allows people to log into third party sites using their Facebook ID.

Sheryl Sandberg, Facebook’s chief operating officer, told The Telegraph: “Facebook is focussing on building the best technology which helps people share content, while at MySpace they are focussing on more a content-led strategy. We would like to have their content, as we already do with many other sites, shared across our network because it is good for our users.

On this one, MySpace CEO and former Facebook executive Owen Van Natta confirmed the talks on the record. But I’m in the position of only being able to refer you to that article.

On the record, MySpace wouldn’t comment. I suspect that the comments will come later when we rewrite the Telegraph’s story along with the rest of the press corps.

It appears to be Music Wednesday on the Internet. On the same day that reports began circulating that Google and Facebook will launch a host of new music features, News Corp’s MySpace is turning up the volume on its own music offering.

The online social network will offer the following new features:

• You already can buy music on MySpace through Amazon, but now you can also get it through Apple’s iTunes.
• All music videos will now be available through a “hub” on MySpace Music. This includes music video recommendations based on what your friends are watching, along with a video player with a link to buy the ones you like, and an A-Z browser to find what you’re looking for.
• An artist’s dashboard (pictured in this blog post). This is not something that fans would see. Instead, it is reserved for artists and bands that want to track their popularity among MySpace users. This is one of the more interesting things that we’ve seen on MySpace. It offers charts, graphs and snapshots of MySpace music data, including where fans are, song plays, profile views, friend count and profile visitors.

MySpace Chief Executive Owen Van Natta says that these moves give the service’s users a “more integrated and comprehensive experience — not just audio in one place and band interaction somewhere else.”

On a deeper level, they are part of a reconstruction of MySpace and its goals that started when News Corp earlier this year replaced top management and brought in Van Natta, formerly of Facebook. Recall that MySpace has not had a great go of things lately, having fallen behind Facebook in the few years since News Corp bought it for $580 million.

As a prelude to talking about music, I asked Van Natta about the big picture and what it was that he saw at MySpace that needed fixing. Some of what we talked about is ground already covered in plenty of previous stories. Here is something else he shared that I thought I should pass along to you:

“Candidly, when I looked at the product road map and plan, there was no better way to describe it than,… it was a mile wide and an inch deep. It was not focused to let the company execute well. We clearly defined the company mission and focused the product roadmap, and reduced the number of initiatives.”

MySpace closed some of the projects that it was working on, including services dealing with weather reports, classified advertising and others. At the same time, Van Natta said, it’s important to mess around and come up with products that might be a hit — but it’s also important to not let them go indefinitely. “If we’re doing a good job, we’re going to invent a lot of things that people don’t like, and that’s ok, and those things cease to exist.”

UPDATE: I neglected to mention this aspect that will be a benefit for MySpace. Here’s how the AP said it:

Social-networking site MySpace is launching a music video service that will pop into millions of profiles at rival Facebook as well. Starting Wednesday, music videos that MySpace has licensed for its site will run as well on the iLike music recommendation application, which the News Corp. unit acquired this month for $20 million.

(Photo courtesy of MySpace. For what it’s worth, the numbers have been falsified so you don’t actually get to see how the Black Eyed Peas are doing on MySpace Music)

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.

Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.

The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant's books. Ebay also stands to keep a 35 per cent stake in the company.

But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the dot.com era.

EBay's justification for the Skype deal in 2005 was how its chat and calling services could serve as an online customer service platform connecting consumers directly into eBay merchants. That never happened.

Instead, product innovation slowed and business setbacks, such as a corporate ban on Skype's network-hogging software inside companies, were allowed to fester, rather than becoming new business opportunities.

Pressure to justify the inflated acquisition price by wringing merger synergies out of the deal also proved a distraction. Into the void stepped newer Internet phenomena such as YouTube, Facebook and Twitter, all of which Skype might have displaced.

To be sure, 15 million users sign on every day to Skype for Web-based chats, phone conversations or video phone calls. Skype has registered nearly 500 million users worldwide since its founding in 2002.

Financially, it is still growing at levels that Web companies like Twitter can only dream about. Revenues of $551 million last year look on track to rise to $700 million in 2009, and the company has a goal of hitting $1 billion within two years. It has been profitable for several years, though Skype will not say by how much.

Yet it will take more than this to justify the valuation put on it by its new owners that says Skype is worth more than four times expected 2009 revenue. This looks difficult as long as its primary business remains undercutting established telephone companies on international calls when those rates are rapidly heading towards zero.

The reality is that -- outside of deals with renegade mobile operator 3 -- Skype is considered a pariah by most of the world's telephone operators. They hate how Skype's free, or nearly free, calling services undercut prices for their own calling plans.

Despite these hurdles, Skype must find its way into the center of the growing convergence between phones and computers. To succeed, it must mount a challenge to the new communication market leaders -- Apple and Google, and even companies such as Twitter.

Only then will Skype be able to claim it has defied the odds and become the company to beat once again.

MySpace is looking to buy Web music service iLike for around $20 million according to several blogs. iLike co-founder Hadi Partovi declined to comment when we asked him and MySpace’s PR team also declined to share details.

All Things Digital has the latest details of the deal which they say is around $13.5 million in cash, with a $6 million earn out for the founders which include Hadi’s twin brother Ali who is CEO. Official confirmation of an agreement is being held up by “thorny tax issues” according to All Things Digital’s sources.

The news makes some sense because as MySpace is fast losing ground to Facebook in the social networking arena. MySpace’s owner, News Corp, has indicated that it sees the site becoming more of an entertainment portal.

In fact according to our sources MySpace Music, the joint venture between MySpace and the major music companies, is one of the few parts of MySpace that’s doing well — at least in terms of popularity and usage.

iLike, which was once the darling of the the digital music start-up world, has ended up struggling like many others, as the industry tries to find a new profitable model for the distribution of recorded music over the Web. iLike has one huge advantage — it is default music application/platform on Facebook. It also has corporate backing from Ticketmaster.

But rather like its host Facebook, iLike’s popularity has yet to translate into meaningful dollars leading to what some of the blogs are terming a ‘fire sale’ of its assets.

AllThingsD also had details of other potential bidders which the blog said included Activision and Microsoft.

(Photo: News Corp CEO Rupert Murdoch and MySpace founder Chris DeWolfe in 2007/Reuters)

Social gaming startups, which offer free-to-play games on sites like Facebook and MySpace, have been all the rage, scooping up funding from the venture capital community and nabbing executives from traditional gaming outfits. The hoopla seems warranted given the meteoric growth many expect to see in the space over the next few years.

Playdom, which was launched last year but only emerged from stealth mode in March, recently made a big splash when it lured John Pleasants from his perch as COO of Electronic Arts to become its CEO. Playdom battles rivals Zynga — which predicts revenue of $100 million or more this year — and Playfish in an increasingly competitive space.

In an interview, Pleasants called his return to the startup space “refreshing” and used a whiteboard to make a convincing case about the industry’s potential. He pegs the overall social gaming market at around $500 million, but expects that to increase ten-fold in the next several years.

Playdom has 13 games, including the popular “Mobsters, and around 20 million monthly users. It has 80 employees and expects to double that number by the end of the year. The company — which is backed by angel investors — won’t discuss its finances, but says it’s profitable and growing revenue by the month.

Free-to-play games generate revenue through the purchase of virtual goods within games — such as a more powerful weapon — that allows a user to advance more quickly. Plesants estimates only 1-3 percent of users actually buy anything in games, although that figure is higher in more popular titles.

Analysts say social games are attracting a large, growing and dedicated audience that is displacing traditional media outlets. Pleasants noted that the average “Mobsters” user spends 45 minutes a day playing the game.

“I don’t spend 45 minutes a day watching TV, yet I pay Comcast $100 a month,” he joked. “Can you imagine If we get users to pay even $1 a month?”

MySpace.com dodged a bullet on Thursday, but in the process the social networking site may have gotten a stinging slap in the face instead.

Hackers trained their fire on social media highflyers Twitter and Facebook Thursday morning, knocking the former entirely offline for a few hours and slowing things down on the latter site.

LiveJournal, a blogging site, was also a victim of the so-called denial of service attacks.

At MySpace, once the Internet’s top social networking destination, life went on as usual.

Perhaps the malefactors didn’t deem MySpace a target worthy of attention. MySpace’s popularity has waned at a time when Facebook and Twitter have experienced massive user growth.

In June, MySpace announced plans to cut 30 percent of its U.S. workforce and to close at least four international offices.

Or perhaps the site, owned by News Corp, was more adept at fending off Thursday’s cyberattacks.

MediaFile wanted to ask MySpace what the story was, and see if it felt snubbed in the event that hackers had overlooked it, but the company would not make a spokesperson available for comment.

Here are some of the day’s top stories in the media industry:

Microsoft takes on Google as Office moves to Web (Reuters)
Jim Finkle reports: “Microsoft will offer for free to consumers Web-based versions of its Office suite of programs, including a word processor, spreadsheet, presentation software and a note-taking program. Microsoft will also host one Internet business version of Office at its own data centers, charging companies a yet-to- be-announced fee.”

Six in 10 companies plan to skip Windows 7 (Reuters)
“Many of the more than 1,000 companies that responded to a survey by ScriptLogic Corp say they have economized by cutting back on software updates and lack the resources to deploy Microsoft’s latest offering.”

MySpace to Take Entertainment Tack (WSJ)
“In a brief interview, News Corp. Chief Executive Rupert Murdoch said MySpace needs to be refocused ‘as an entertainment portal.’ Mr. Murdoch described his vision for MySpace as a place where ‘people are looking for common interests,’” writes Julia Angwin.

15-Year Old Analyst Trashes TV, Newspapers, Radio, And…Twitter (Business Insider)
“A 15 year-old working in Morgan Stanley’s London office has written what may be the firm’s most popular research report in years,” writes Henry Blodget. “In it, he explains that none of his friends read newspapers and few watch TV. He also, interestingly, says none of them use Twitter, because no one reads the tweets texting costs money.”

McGraw-Hill trying to sell BusinessWeek (Reuters)
Jui Chakravorty Das and Robert MacMillan report: “McGraw-Hill Cos Inc is trying to sell BusinessWeek magazine, a source told Reuters on Monday, at a time when media advertising sales are slumping and would-be buyers for newspapers and magazines are scarce. McGraw hired boutique investment bank Evercore Partners Inc to manage the sale, said the source, who was familiar with the situation but not authorized to discuss it publicly.”

In other news:

• At $6.5 Billion, Facebook is Now Worth More than CBS (Mashable)
  
• Magna Forecast: Ad Recession to Drag On (E&P)
  

Social media is a big topic of discussion at Sun Valley. And Google, the king of Internet search, has been talking to the various players.

Google CEO Eric Schmidt said on Thursday that he’s “chatted” with the MySpace folks while at the conference, and noted that Google has had many conversations with Twitter in the past.

Google’s $900 million advertising deal with MySpace will expire next year. Some analysts believe any new deal will involve Google paying considerably less money to run ads on MySpace, whose popularity been eclipsed by Facebook.

Asked whether Google would pay $900 million again, Schmidt replied “we never say never.”

“Remember the economics are different, the traffic is different, market positions are different. That’s why these deals expire,” he said.

As for Twitter, which was previously rumored to be a Google acquisition target, Schmidt said Google talks to Twitter a lot, though he did not specify about what.

“We’ve had a lot of conversations. There’s nothing to announce,” he said.

Facebook won the bragging rights to being the world’s largest social network site last year, based on the worldwide number of unique visitors to its site.

But what about some of the other metrics that advertisers care about?

According to the latest figures from Nielsen, Facebook and rival MySpace each have key strengths to woo advertisers with.

When it comes to “engagement,” that is how much time people are actually spending on a site, Facebook is making big gains. In April, the total number of minutes spent on the site in the US surged a whopping 700 percent from April 2008, to 13.8 billion minutes.

By contrast, MySpace saw total minutes on its site decrease 31 percent year-over-year in April to roughly 5 billion minutes.

Facebook’s jump in total minutes was no doubt helped by the increase in the sheer number of people joining the service in the past year - unique US visitors to Facebook increased 217 percent year-over-year in April according to Nielsen.

But even taking the larger audience into account, Facebook is keeping people engaged longer. The average Facebook user in the US spent 3 hours and 14 minutes on the site in April, up 152 percent from the 1 hour and 17 minute average at the same time a year earlier, according to Nielsen.

When it comes to watching videos on a social network though, MySpace is still king.

Nielsen said that the average US MySpace visitors spent 38.8 minutes watching video on the site in April, compared to 11.2 minutes on Facebook.

And while Facebook streamed 41.5 million videos to its users in April, that’s a pittance compared to the Web’s top video destinations like YouTube and Hulu.com, which streamed 5.5 billion videos and 373 million videos in April respectively.

Facebook co-founder and CEO Mark Zuckerberg spoke to the Reuters Global Technology Summit on Tuesday and while he wouldn't touch TechCrunch's report about financing and valuation, he did opine about a few of Facebook's Web peers:

On the difference between Facebook and MySpace:

I think MySpace defines themselves as more of a media company and a media portal. A way to see the different content that is going on, or a way for a News Corp parent company to spread content through the network. Facebook has always been more focused on helping people build out their identity, helping people maintain their relationships and communicate really efficiently. We have talked about ourselves as a technology company a lot as opposed to a media company.

On the difference between Facebook and Twitter:

We respect Twitter and we think they are a great company. I think Twitter's focus different is markedly different from Facebook's. They are not really at all about a user's identity. They are more about real time communication. People are sharing more and more information...and on a more frequent basis. If you extend that out then there is a good amount of information that is being shared in real time. That's where a service like Twitter comes in, and that's why that's also one piece of what we want to do. If your friend does something important...there is no reason why you don't want that update immediately. Real time is clearly one of the growing trends but i don't think it's the whole picture.

Photo: Reuters