MySpace Losing $1 Million Per Month On Empty Offices
Don’t be shocked if ads for 420,000 square feet of office space start popping up all over MySpace. It seems that the social networking company no longer intends to use a particular facility, but until it can unload the space, has gotten stuck paying over $1 million per month.
Matthew Garrahan reported late yesterday, "The company is locked into a 12-year lease worth about $350m that it signed in August 2008, when the number of people using MySpace was increasing and the social network was running out of space in its Beverly Hills offices."
The economy in general has taken a big hit since then, however, and MySpace in particular decided in June to lay off about 400 employees. Hence the decision not to go ahead with the expansion.
So MySpace has been saddled with a lot of office space in Playa Vista, California that no one (as of yet) seems interested in subleasing. And that space will in fact become more costly to MySpace over time, since payments are scheduled to increase. (If you do the math, $350 million over the space of 12 years averages out to $2.43 million per month.)
Maybe this snafu will result in an interesting resolution, at least. If not the office ads on MySpace, perhaps realtors could get offered the chance to have their profiles swapped with Tom Anderson’s for a day.