MySpace, the one-time leading social networking site owned by News Corporation, announced earlier this week it will lay off approximately 400 employees, or nearly 30 percent of its staff, in an effort to return to a “start-up culture.”

Owen Van Natta, CEO of MySpace and former Facebook executive, said in a statement that MySpace would cut its “bloated” staff levels and return to an “environment of innovation that is centered on our user and our product.”

This move comes at an interesting time when Facebook, once the second most popular social networking platform, is now leading MySpace with more than 200 million users worldwide. In May, we wrote a blog post entitled, “Facebook vs. MySpace” and discussed the changing media landscape and the competition between social networks including Facebook, MySpace and Twitter.

Results from a March 2009 comScore survey revealed MySpace had more than 70 million total unique users in the U.S. However, statistics now show Facebook has surpassed MySpace in terms of active memberships worldwide and matches MySpace’s U.S. numbers with approximately 70 million users.

While MySpace is still a top social network for celebrities and music, Facebook has become the social networking destination for those who want to connect with old friends, network with people in similar industries and share photos and status updates with family and friends. Analyst Josh Bernoff with Forrester Research comments, “If MySpace is about your entertainment life, Facebook is about your whole life.”

As social networking continues to gain traction, we anticipate the competition will continue to increase. However, the success of each of these platforms will depend on each company’s ability to innovate and provide users with tools to connect them to what matters most in their lives.

Perhaps MySpace’s layoffs will help the company re-focus and reinvigorate its site to take social networking to the next level. It will be interesting to see what’s next for the company and you can bet we’ll be following this closely.