MySpace CEO and would-be savior Owen Van Natta, the studmuffin hired away from Facebook, told the Financial Times he's not gunning for his ex employer any more:

"Facebook is not our competition," he said. "We're very focused on a different space."

Van Natta added that MySpace it will focus on its strength: Music. MySpace has become the default Web host for independent rock bands, and recently purchased music software company iLike.

MySpace wasn't always so blasé about social networking, the company used to have Facebook in its sights. It was barely two years ago that Van Natta's predecessor Chris DeWolfe got an urgent phone call from Peter Chernin at MySpace's parent company saying, "I need a plan for dealing with Facebook in two weeks." This led, according Julia Angwin's book Stealing Myspace, to a strategy for dealing with "the Facebook challenge head on," presented at a Merrill Lynch conference.

"I realize every person in tis room wants to ask me about Facebook, and, frankly, I want to talk about Facebook," [Fox Interactive Media president Peter] Levinsohn said.

But these days MySpace has just one third of Facebook's users. No wonder the company is singing a different tune.

It's just not a well advised one. Instead of competing with a money-losing internet company headed by a twentysomething college dropout, MySpace will now be taking on Apple (cash hoard: $30 billion) and Google (annual profits: $5 billion, operator of YouTube and soon to be a retailer of MP3s). Sounds like a great plan.

Says TechCrunch:

MySpace has been holding a number of meetings for staff... during which they've referred to the recently terminated employees as "fat". Unfortunately, some of these "fatty" employees have been present at these very meetings - the company has kept a number of terminated employees onboard through the duration of their contract...

And if that weren't bad enough, workers' final paychecks will bounce, incurring a bank fee and possible overdrafts, since MySpace screwed up its calculations and put a stop payment on the drafts. Hopefully you didn't deposit yours too quickly!

It's a good thing MySpace's business doesn't involve brokering sensitive relationships or allowing people to communicate clearly with one another.

More brutal honesty from the official statement (emphasis added):

"MySpace grew too big considering the realities of today's marketplace," said Jonathan Miller, News Corporation's chief executive of Digital Media... "I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward. I am confident in MySpace's next phase under the leadership of Owen and his team."

The sort of talk may rattle employees, but it should hearten investors: without this sort of sober and honest thinking, Van Natta (pictured) doesn't even have a prayer of turning around his social network to surpass his nemesis and former boss Mark Zuckerberg at Facebook.

(Pic: Dan Farber)

A deal with Google is about to shrivel, and now MySpace is facing layoffs and needs a new sales chief, sources "close to" Van Natta and fellow News Corp. newcomer Jon Miller tell Business Insider.

Expectations for MySpace's future were pretty low to begin with; the company's new leaders and their associates have now pushed them so low that the barest gains will make them look like heroes.

(Pic via All Things D)

I still remember the day I called you up and tried to recruit you to Valleywag — only to learn that that sneaky rapscallion Nick Denton had beaten me to the punch by one whole day in offering you the night shift at Gawker. It all worked out in the end — and perhaps better than I could have imagined back in 2007. But the main lesson I take away from that is that you can get Denton to do pretty much whatever you want if you're patient enough.

Denton, who has a weakness for idle truisms, likes to say that gossip is a young man's game. But you're old enough to remember the first dotcom bubble, and how it popped. That's going to be key in the next few years. We may escape a depression, but Silicon Valley is facing a reckoning nonetheless. Too much venture capital chased too few idea for far too long — and a buoyant economy can no longer hide the startup factory's mistakes.

The biggest mistake you can make is getting too close to your Valley sources and fall for their groupthink in order to ingratiate yourself. (You know how I've scolded you for gullibly buying the hype that Twitter is an amazing source of real-time news. Okay, perhaps it was — for five seconds, before the blowhards, spammers, and self-promoters found it.) At least your schooling will help you remain an outsider: As a Berkeley grad, you'll have an instinctive dislike for the Valley's Stanford in-crowd.

At the same time, don't forget that your years living, studying, and working in the Bay Area give you a better understanding of your beat than anyone can have from 3,000 miles away. Gabriel and Nick, though well-intentioned, have the Manhattan media habit of confusing proximity with relevance. Gawker is much more than New York now — and Valleywag's unique place therein must be firmly grounded in northern California's shaky soil.

Remember: Love is far more powerful than hate. Keep a clear-eyed passion for the Valley. Most tech reporters here secretly loathe their subjects, but try to disguise it with a supine gladhandery as they beg for scoops about new startup website features. They hate themselves and the people they write about. Sad, right? By loving the Valley, you can write about it more honestly than any of them. Just prepare to have your heart broken again, and again, and again. To truly love something, you must love it with all its failings.

For example, the Valley's Alice-in-Wonderland economics — why is Twitter worth more than most startups precisely because it has no revenues to speak of? But the thing you must love most about Silicon Valley — the part of the story the local press corps always skips over in favor of buzzwords, punditry, and lazy analysis — is its people.

The Valley's story is not one of chips and code. It is not a tale of technology. It is the always-running tragicomedy of the people who make technology.

Here are a few characters to watch. I hope it helps — but I can't wait to see who you add to the list.

Marissa Mayer Valleywag's first story remains its best. The public face of Google, Mayer also runs search, the only business that matters there. The cupcake frosting of her girly image — one she assiduously advances at every opportunity — may humanize the otherwise robotic computer scientist. But it is a distraction. The real question to ask about Mayer: Does her spreadsheet-ridden management style scale to new problems beyond search? Are her strengths now turning into limitations?

Mark Zuckerberg Ignore the nerd façade. Facebook's 25-year-old CEO is headstrong and ruthless. Here's the grand irony of Zuckerberg's revolutionary venture: He claims to be all about openness and sharing. But his imperious, my-way-or-the-highway management style has created a fractious culture of dishonesty, delusion, and disillusionment at the social network. His underlings either learn to say things they don't believe, or they move on. This is why Sheryl Sandberg is exactly the wrong COO for Zuckerberg. The veteran of the Clinton Administration has forgotten her Google training and reverted to Washington-player form, where staying on message is all that counts. Facebook's best hope is that Zuckerberg learns from his mistakes — but first he has to recognize them as mistakes.

Carol Bartz Yahoo's CEO swears like a sailor. At last, a boss who has found the right language to describe Yahoo's plight! Bartz brings a refreshing frankness to Yahoo. But the already demoralized troops she inherited will need to start seeing results. Otherwise, Valleywag will continue to be a steady recipient of leaks from Sunnyvale.

Elon Musk The CEO of Tesla Motors and SpaceX is living the geek high life, playing with fast cars, rocket ships, and other people's money. It's wonderful that Musk has realized even a small part of his childhood fantasies. But he risks destroying his dreams by refusing to reconcile them with reality. Factcheck everything Musk says. For example, was he actually running either Zip2 or PayPal, the previous dotcom successes he likes to cite in his bio, when they were sold?

Owen Van Natta Everyone is going to give MySpace's new CEO a pass, because the so-called "social portal" is so clearly troubled. If the former Facebook executive succeeds in a turnaround, it will be viewed as an astonishing achievement; if he fails, people will say no one could save MySpace. That's not fair. Hold his feet to the fire, and judge this disturbingly tan rock-star boss like anyone else on the list.

Peter Thiel Thiel, the PayPal cofounder, likes to brag about how he recruits only the best brains from the best schools to work at Clarium Capital, his hedge fund. Oh, really? Take a look at their résumés on LinkedIn. Like so many of this outspokenly harebrained libertarian's theses, the claim sounds good on paper but doesn't stand up to inspection. Valleywag, alone in Silicon Valley, can take a keen look at Thiel's rhetoric without being dazzled by his inflated wealth.

Tim Armstrong Like Van Natta at MySpace, Armstrong, a Google golden boy now charged with running AOL, will be enjoying a honeymoon. Don't worry: There are plenty of disgruntled AOLers who will gladly help you break up the lovefest.

Jimmy Wales Remind me: What does Wikipedia's founder actually do to earn his keep, besides give speeches? In all this time, I was never able to figure that out. Maybe you can!

Eric Schmidt When did Google's CEO turn into such a raging egomaniac? When the blogosphere was the only corner of the Internet that criticized him, he dismissed it as a "cesspool." But now everyone from Hollywood to the New York Times to the Federal Trade Commission is looking askance at his online empire's practices. "Don't be evil" has turned into "don't get caught." He will, though. Be ready when he does.

Larry Page and Sergey Brin Google's wonder twins have achieved geek nirvana, creating a cloistered campus with free food, lava lamps, and exercise balls to spare. They have a fleet of jets to transport them to rocket launches or rendezvous with Richard Branson and Bono. They've even managed to get married and reproduce. Just one question: Are they still sane? Were they ever?

There are many people who will help you — many of the same people who helped me so much, I hope. They include:

• Nick Denton, for putting up with three years of playing hard to get — and then putting up with much more besides.
• Brian Lam, Choire Sicha, Noah Robischon and Lockhart Steele, for tag-teaming me into taking the job.
• Gabriel Snyder, for expertly steering Valleywag into Gawker's welcoming arms.
• All the Valleywaggers: Paul Boutin, Nick Douglas, Megan McCarthy, Tim Faulkner, Mary Jane Irwin, Jordan Golson, Nicholas Carlson, Jackson West, Melissa Gira Grant, and Tim Woolery. You guys, we've been through so much together!
• Richard Blakeley: We made sweet Photoshop magic together.
• Everyone at Gawker Media: How much do I love you? Far more than just five milligrams.
• Sarah Lacy, Kara Swisher, and Peter Kafka: My peers and fellow purveyors of Valley gossip, you constantly inspired me.
• Countless sources, tipsters, and fellow scribes: Please understand that I esteem you none the less for not naming you here. In fact, your continued anonymity is the best sign of my abiding affection.

The image associated with this post is best viewed using a browser.Good luck, Ryan. I'll be reading eagerly.

Don't screw it up.

Yours,

Owen
The Valleywag

(Photos by Brian Solis and Scott Beale/Laughing Squid)

He certainly has the motivation: revenge — and the success which is its best form.

Van Natta joined Facebook when the startup was an also-ran site, limited to college kids and run by college dropouts, and steered it through a period of hypergrowth. He was a key negotiator behind an advertising deal with Microsoft which provided Facebook with a solid financial footing as its user numbers blew up. His payback? Founder Mark Zuckerberg demoted him gracelessly in August 2007, and left in February 2008 — the first of many high-profile departures by executives who had fallings-out with Zuckerberg.

He then spent months hanging out and vacationing before joining a Palo Alto music startup he'd invested in, Project Playlist, as its CEO. Playlist's music widget for social networks had been banned by both Facebook and MySpace as it feuded with the major labels, and while he didn't manage to get it reinstated on either site, Van Natta did strike a deal with EMI.

Deals are what Van Natta built his reputation on. He spent seven years at Amazon.com, ultimately becoming its vice president of worldwide business development. Before that, his LinkedIn profile offers few details. There's a six-year gap between his 1992 graduation from the University of California at Santa Cruz with a BA in English and American literature and his 1998 arrival at Amazon.

Here's what we've reconstructed of his background: CNET editor Charlie Cooper recalls him being a sales intern at Computer Shopper in the early '90s. By 1996, he was working at Softbank Expos, a conference organizer. He then joined Zip2, a now-forgotten dotcom started by Elon Musk, now the CEO of Tesla Motors, and became its senior director of network advertising. In 1998, he joined PlanetAll, a nascent social network, as its VP of sales, shortly before it was acquired by Amazon.com.

What this alleged Internet studmuffin's resume tells us is that he's a smart opportunist. Is that what MySpace needs? It has certainly missed enough opportunities along the way. The other skill Van Natta's noted for is the ability, rare among slick suit-wearing dealmakers, to be tolerated by engineers. MySpace has never been a technology-driven company, and that flaw finally caught up with it over the past couple of years.

If Van Natta plays to his past reputation and just cuts some flashy deals, he'll solidify his reputation as a dilettante dealmaker, and doom his career. If he woos the right talent to MySpace and turns the place around, he'll prove he deserves to be a CEO — and rub his success in the face of a certain snotnosed punk in Palo Alto.

Van Natta, who has long aspired to run a consumer Internet startup, is an obvious choice. Having fallen out of favor with Mark Zuckerberg, Facebook's fickle 24-year-old CEO, he is spending his exile running a music startup, called Project Playlist, out of an office building shared with Facebook. While Van Natta has managed to extricate Playlist from some of its legal troubles with the music labels, it hardly seems like a gig that encompasses his ambitions. Having worked for Elon Musk and Jeff Bezos as well as Zuckerberg, Van Natta seems capable of dealing with a testy owner-CEO like Rupert Murdoch.

Calacanis, meanwhile, has no qualifications for the job. He tanked his first media company, then sold his second one, Weblogs Inc., for $25 million to AOL, where he accomplished nothing of note after the acquisition. He's since raised far too much money for Mahalo, a Web 2.0 rehash of Yahoo's 1995-era Web directory. Silicon Alley Insider thinks he should be MySpace's new CEO because he worships Jon Miller, the former AOL CEO who played mentor to him before Miller was fired and Calacanis quit. Ever the clever fameball, Calacanis is playing coy and saying "No comment" as loudly as possible.

Miller now runs News Corp.'s Internet operations, so he's the one to pick DeWolfe's successor. We have a suggestion: Hire both! Van Natta can do the hard work of fixing MySpace. While he's affable enough, he hardly seems to crave attention.

Tom Anderson, DeWolfe's sleazy sidekick at MySpace, is every MySpace user's first friend when they sign up. He needs a replacement, too. Why not replace him with Calacanis, the ultimate Web fameball, who seems to measure his self-worth by his number of Twitter followers? He doesn't need any other responsibilities. And as MySpace's Chief Ego Officer, he can still claim to be CEO.

There's an innocent explanation: His digital-music startup, Project Playlist, which recently scored a deal with EMI, has its offices in a downtown Palo Alto building shared with Facebook. But that doesn't explain why our tipster, who spotted Van Natta twice today, saw him walking from that building to another Facebook office. Could be a coincidence. Or it could be that Van Natta, who remains close to Facebook executives like Chamath Palihapitiya and Dan Rose, is up to something.

A group of record labels sued Project Playlist in April — which is, sad to say, the music industry's usual approach to beginning talks. Van Natta has a reputation as a skilled dealmaker, and he led talks with the labels while at Facebook. But sources who have had recent negotiations with labels say they have been granting only short-term licenses for music — typically a year in length. Their strategy is to give startups a year to grow — and then shake them down for most of the profits they generate. Does Van Natta think he can get a better deal? Since he's taking the job, he must be betting on it.

Van Natta is well qualified, and the job involves partnerships and business development, two areas where he's especially skilled. And he's long said he wants a CEO job at a consumer Internet company, but I'm skeptical he'll take the gig. He strikes me as too independent to answer to meddling MySpacers and hidebound music-industry executives. He also likes to be involved in the product, and it sounds like MySpace Music is mostly developed already. Schuon seems a more likely candidate. His main qualification: He previously ran Pressplay, an online music-industry joint venture. That's also the main strike against him, since Pressplay was a huge flop.

Zuckerberg tends to fall in love with his latest hire, and give that person more and more responsibility, until there's some obvious failure. Even from the outside, it's crystal clear that's what happened with Oven Van Natta, Sandberg's predecessor as COO; it happened, too, with Chamath Palihapitiya, whose portfolio waxed and waned with Zuckerberg's favor.

So Sandberg's rampage through Facebook's technical ranks is just par for the course. If past experience is any indication, Zuckerberg's hanging back, keeping his fingerprints off her actions, and waiting for her to trip up. Her botched handling of ace product marketer Ben Ling's departure may be what turns Zuckerberg against Sandberg — or not. What's clear: When his disfavor arrives, it will be sharp, cold, and unmovable. Sandberg won't know what hit her. And Zuckerberg will be all smiles — like he was today in San Francisco.

CAN YOU PLEASE HELP US GET IN CONTACT WITH OWNE VAN NATT TO OFFER HIM TO TAKE THE HELM OF PWNED.COM, AND GET GREAT $ TO REPEAT WHAT HE DID WITH FACEBOOK

Then, two minutes later, Leach sent us this email:

One is former COO Owen Van Natta, who won the right to sell shares as part of his departure from the company. The others, we're told, are a handful of "hardship cases." Zuckerberg has said an IPO won't come until 2009 at the earliest; in the meantime, he's resisting efforts to create a free market in its still-private shares. To my mind, the persistent rumors — apparently untrue — that Zuckerberg himself has sold shares just show how eager his underlings are to cash out.