MySpace co-founder Chris DeWolfe

MySpace co-founder Chris DeWolfe is stepping down as chief executive of the social network, according to MySpace owner News Corp announcement.

News Corp's new chief digital officer Jonathan Miller said that "by mutual agreement, Mr. DeWolfe will not be renewing his contract and will be stepping down in the near future."

In a statement, News Corp also said that Miller was "in discussions" with MySpace president Tom Anderson which would have him "assuming a new role in the organisation."

News Corp said DeWolfe will continue to serve on the board of MySpace China and be a strategic advisor to the company.

"In a little under six years we've grown MySpace from a small operation with seven people to a very profitable business with over 1600 employees," said DeWolfe.

"It's been one of the best experiences of my life and we're proud of, and grateful to, the team of talented people who helped us along the way."

Anderson and DeWolfe are credited with creating MySpace, which launched in 2003 and was bought by News Corporation in 2005 for the bargain price of $US580 million.

"From the very beginning, our driving passion has been simple - to create and foster a platform where people across the globe can not only meet and interact, but share music, videos, thoughts and ideas," Anderson said.

"I love this business, and look forward to its next chapter."

Miller referred to Anderson and DeWolfe as "true pioneers" and credited them with building MySpace into a "vibrant creative community" with 130 million followers worldwide.

Miller added that a new management structure for MySpace will be announced "in the near future."

Rumors that DeWolfe and Anderson would be dethroned began circulating earlier this year as MySpace logged a drop in the number of users while its young rival Facebook posted gains.

Facebook replaced MySpace last year as the world's most popular social-networking website, and industry figures show Facebook has been widening its lead. Facebook welcomed its 200 millionth user last week.

Mark Zuckerberg, who created Facebook with two Harvard University roommates five years ago, announced the milestone in a post on the official Facebook blog.

The 24-year-old chief executive described the milestone as a "really good start."

Zuckerberg, Dustin Moscovitz and Chris Hughes launched Facebook in February 2004 as a platform to connect their fellow Harvard students.

It quickly spread to other schools around the United States and has since blossomed into a worldwide network that has dwarfed rival MySpace.

Facebook became a sensation after it opened to the public and the software platform opened to allow outside developers to create fun, hip or functional mini-applications people can add to their profile pages.

While the number of users has grown at an amazing clip, the Palo Alto, California-based Facebook is yet to prove how it is going to translate traffic into cash.

US software giant Microsoft bought a 1.6 percent stake in Facebook in 2007 for $US240 million, valuing the social network on paper at $US15 billion - but that was before the bottom fell out of teh world economy.

MySpace, in comparison, claims it has been making money from the outset.

MySpace has worked to position itself as a platform for musicians and their fans, and even added karaoke services.