The time has come for big changes at MySpace, according to Pali Research analyst Richard Greenfield.

In a research note this morning, Greenfield asserts that, with just over a year to go on the News Corp. (NWS) unit’s search advertising deal with Google (GOOG), “it appears as though Google simply does not care about social search.” He contends it is difficult to imagine Google paying anywhere near what they were previously shelling out to MySpace, “especially as the inherent functionality of social networks is diminishing the importance of search.” The current deal expires in June 2010.

Greenfield estimates that MySpace will get about $300 million in revenue from Google in both the June 2009 fiscal year and in FY 2010, or about 35 percent of revenues in each year. He says there could be some competition for a new deal from Yahoo (YHOO), AOL (TWX) and MSN (MSFT), but he nonetheless sees a 50 percent drop in search fees. He also notes that Fox Interactive Media, the NWS unit that includes MySpace, is seeing costs increase even as revenues shrink.

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News Corp.’s (NWS) Fox Interactive Media digital division is laying off about five percent of its workforce, or about 100 people, amid continued cost-cutting efforts, according to a person familiar with the situation.

The cuts, which started in the last month, are happening gradually unit by unit, the person said. The layoffs include all groups, from social-networking site MySpace to photo-sharing site Photobucket to mobile. (News Corp. owns Dow Jones, publisher of The Wall Street Journal and the owner of AllThingsD.com.)

“I can confirm that several of the groups within FIM are eliminating some jobs and repurposing others,” a FIM spokesman said in a statement. “This is part of a larger effort we’re making to put FIM in the best possible position to succeed now and, more importantly, to emerge even stronger once the markets recover. It’s important to note that we continue to hire in many areas.”

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News Corp. execs did more than just admit that they weren’t going to hit their revenue goals for MySpace and Fox Interactive Media today. They also fessed up to another open secret: Selling ads on social networks is really difficult. How difficult? Consider that even while MySpace and all of the other FIM sites continued to grow, FIM revenues dropped from $233 million in Q2 to $210 million in Q3; about a third of that total came from a three-year guaranteed deal from Google.

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Recently, Nielsen/NetRatings revised the way it ranked top Web sites to include “time spent” in its ranking algorithm. I very much applaud this change, because it’s an extra level of information that will be circulated freely to give people additional ways to consider the rankings. When it comes to data, especially data for these sort of rankings that are used when making advertising decisions, more information flowing freely is definitely better, and incorporating information on how engaged visitors are with Web sites is a big improvement.

One of my major pet peeves is that marketers will seemingly always use bigger, less meaningful (or completely meaningless) numbers when very meaningful, but smaller, numbers are available. The beauty of this for Nielsen/NetRatings is that the bigger number for time spent in some cases, especially for AOL and Yahoo, is actually meaningful.

While I don’t agree with Nielsen/NetRatings’ decision to completely abandon the page view measurement, I do agree with the premise that page views are not always a reliable indicator. However, I’m a more-information-is-better information guy, so my preference would have been to include visitors, time spent and page views. If there are properties with very high page views and hardly any time spent at all–i.e., views that average one second per page, people will figure out what to do with that data.

All numbers referenced are courtesy of Nielsen/NetRatings and are for home and work panels in the U.S. for the month of May. Here is the release with the data tables.

I love that the data-measurement companies exist. What I don’t like is what often seems like unnecessary confusion these companies sometimes cause. In its press release Nielsen/NetRatings included two tables, and there are some things that don’t sit well with me.

In the top-10 ranking table, all AOL properties are rolled in together, and all Yahoo properties are, but YouTube is broken out of Google’s total. Since Google owns YouTube, this doesn’t seem like an apples-to-apples measuring and causes exactly the sort of BS confusion I hate to see bandied about.

For the month of May, Google properties (minus YouTube) had almost 20 million more unique visitors than AOL properties (110.2 million vs. 91.6 million), but even with about 20 million fewer visitors, more than three times as much time was spent on AOL properties (25 billion minutes for AOL versus 7.4 billion minutes for Google).

While Google is continuing to stomp on Yahoo with basically three times the volume, traffic and time spent for search, when comparing all of Yahoo’s properties to all of Google’s properties (minus YouTube), an interesting thing happens. Yahoo is very close to Google in total visitors (107.6 million), but visitors to Yahoo’s properties are much more engaged, spending more than twice as much time (19.6 billion minutes).

Disclosure: I had already thought Yahoo was not fairly valued relative to its massive scale and mostly on the strength of everybody, including my pal Kara Swisher beating up on those crazy kids in Sunnyvale so much, I recently purchased 1,000 shares of Yahoo in my IRA. (It’s currently underwater by about 30 cents a share, but I am looking at this as a 10-year-or-longer hold).

My first reaction to the new data was, “Wow, Facebook isn’t a top-10 property based on minutes, but MySpace with over 7.5 billion minutes is!”

I’m being sarcastic; I’m not at all surprised about Facebook not being in the top 10 in May. While I do not know how many billions (or even hundreds of millions) of minutes Facebook had in May, I know that according to Nielsen/NetRatings top-10 minutes for May, it was less than 2.1 billion (No. 10 You Tube). In fairness though, I’d predict if I had access to all the data, when the numbers for July are released in a couple of months, Facebook will have shown growth and MySpace probably won’t, though it’s much easier to have double-digit growth off a smaller base.

Some additional points I’ll wind up pondering a little:

• If I read the two tables correctly, there is hardly any usage at all in the Fox Interactive Media properties outside of MySpace. While I’m not surprised MySpace is by a large margin Fox’s biggest property, I am surprised that MySpace accounted for 96% of the overall minutes. May was television sweeps; this shows that relatively speaking nobody streamed “24″ or any of Fox’s other shows via Fox TV’s Web site. I suppose I’m not terribly surprised by that, either.
• Gamers are extremely engaged. Electronic Arts Online was No. 8 on the list with 3.5 billion minutes. The fascinating aspect of that to me is EA Online racked up all those minutes with only 8.5 million visitors. Contrast that with YouTube’s 2.1 billion minutes on 48.2 million visitors.
• How valuable is this list in terms of valuing the properties or making ad buys? The data are good to have, but beyond the top five or six properties, I’m not sure how useful this list is. Minutes and level of engagement matter, but when it comes to ability to sell advertising, reach (number of visitors) is still extremely critical.
• If, for example, EA Online’s numbers include access to its site via Xbox Live and its highly used forum discussions, that’s a lot of time spent on content that doesn’t include any advertising.

While the new measurement raises many questions, and it may take a while to get everyone on the same page, I view it as positive progress and think in many instances the minutes data are very useful–though again, I would still continue to include page views as well. More information, even if it includes inflated page-view numbers, is still better than less information.

Over time, these new measurements will help us better figure out how to value Web properties, but there are many things to beware of when it comes to “top 10” lists. Minutes aren’t the actual measure of value unless you can make money with those minutes, and even within this, one must be careful.

MySpace has huge minutes, but its ads are all by Google! Google is making money on MySpace, and MySpace (or Facebook for that matter) isn’t making nearly as much for its ads as AOL or Yahoo, because it uses a third party (the same is of course true for Facebook). Also, these rankings might lead one to believe that EA Online is a more valuable property than, say, ESPN or the New York Times, and I don’t believe that is true at all, though the numbers do indicate EA Online is probably more valuable than people had previously considered.

The numbers do help, but you’ll still need to think about them carefully.