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.

Police Investigating Death of Freddie Mac Official David Kellermann

The chief financial officer of Freddie Mac, one of the mortgage giants at the heart of the nation's financial meltdown, was found dead in his basement early Wednesday morning in what police said was an apparent suicide. David Kellermann, 41, apparently hanged himself in his suburban Washington home, said a law enforcement official familiar with the investigation. He asked not to be identified because the investigation was ongoing.

Kellermann was promoted last September when the government seized the mortgage company and ousted its top two executives. Neighbors said Kellermann had lost a noticeable amount of weight under the strain of the new job. Some neighbors said they suggested to Kellermann should quit to avoid the stress, but Kellermann responded that he wanted to help the company through its problems. The neighbors did not want to be quoted by name because they didn't want to upset the family.

Kellermann oversaw a staff of about 500 at Freddie Mac's McLean, Va., headquarters and was working on the company's first-quarter financial report, due by the end of May. Federal regulators closely oversee the company's books and sign off on major decisions.

That relationship has been tense and stressful, with Kellermann working long hours, a colleague said. Freddie Mac executives recently battled with federal regulators over whether to disclose potential losses on mortgage securities tied to the Obama administration's housing plan, said a person familiar with the deliberations who was not authorized to discuss the matter publicly.

Freddie Mac, which owns or guarantees about 13 million mortgages, has been criticized for financing risky loans that fueled the real estate bubble and are now defaulting at a record pace. The company lost more than $50 billion last year, and the Treasury Department has pumped in $45 billion to keep the company afloat. Last month, David Moffett, the government-appointed chief executive, resigned in frustration over strict oversight.

Kellermann worked for Freddie Mac more than 16 years, starting out as a financial analyst and auditor.

Freddie Mac and sibling company Fannie Mae have both come under fire from lawmakers because they plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs. Kellermann got $170,000 and was to receive another $680,000 over the next year.

Federal prosecutors in Virginia have been investigating Freddie Mac's business practices. But two U.S. law enforcement officials, who spoke on condition of anonymity because they were not authorized to discuss the Freddie Mac investigation, said Kellermann was neither a target nor a subject of the investigation and had not been under law enforcement scrutiny.

Police responded to a 911-call at 4:48 a.m. at the suburban Virginia home Kellermann shared with his wife Donna and 5-year-old daughter Grace.

Paul Unger, who lives across the street from the Kellermanns in the Hunter Mill Estates community in Fairfax County, called the family a "solid, salt-of-the-earth kind of family" that hosted the neighborhood's Halloween party. "He was just a nice guy ... You cannot imagine what kind of pressures he must have been under," Unger said.

Kellermann graduated from the University of Michigan and was such a fan of the school's sports teams that he named his boat the "Wolverine Dream 2." He later went to business school at George Washington University and started at Freddie Mac in 1992.

Jeffrey Martin, a lawyer and high school classmate from Bay City, Mich., recalled that Kellermann wanted to be "Alex P. Keaton," the television character played by Michael J. Fox on the 1980s sitcom "Family Ties."

Kellermann "knew he wanted to climb the corporate ladder, and he climbed the corporate ladder," Martin said.

This is at least the fifth high-profile executive suicide in as many months.

In January, German billionaire investor Adolf Merckle, who lost a fortune in shorted Volkswagen stock, threw himself under a commuter train. Patrick Rocca, an Irish property investor who lost millions when the real estate market bottomed out, waited until his wife took their children to school before he shot himself in the head. Outside Chicago, real estate mogul Steven Good was found dead in his Jaguar, apparently from a self-inflicted gunshot wound.

And three days before Christmas, Rene-Thierry Magon de la Villehuchet killed himself in his 22nd-floor office in Manhattan. He'd lost his entire savings, and his clients' money, to Madoff's alleged Ponzi scheme.

News of Kellermann's death came as a shock to employees of the McLean, Va.-based company, with those who knew Kellermann tearing up on Wednesday morning and a quiet mood prevailing. Senior executives at the company heard the news on local radio before going to work.

Freddie Mac canceled a bond offering on Wednesday and top executives visited the family's home to offer condolences. John Koskinen, the company's interim chief executive, spoke to workers at an 11 a.m. staff meeting mourning Kellermann's loss, telling employees that they could use the company's counseling services and take time off if necessary.

In statement e-mailed to employees and the media, Koskinen called Kellermann "a man of great talents .... His extraordinary work ethic and integrity inspired all who worked with him."

Treasury Secretary Timothy Geithner said in a statement that "our deepest sympathies are with his family and his colleagues at Freddie Mac during this difficult time."

And Michael Ferrell, executive director of the D.C. Coalition for the Homeless, where Kellermann was a volunteer board member, described him as a "compassionate, dedicated and committed."

Opel Workers At Loggerheads With Govt Over Fiat

Germany's powerful IG Metall labor union is at loggerheads with the federal government over the future of General Motors Corp.'s (GM) subsidiary Adam Opel GmbH, the union said Thursday.

Union delegates sitting on Opel's supervisory board Thursday publicly discussed the possibility of Italian car maker Fiat SpA (F.MI) taking a controlling stake in the German car maker. Fiat Thursday said it had "nothing to announce" regarding Opel.

The union threatened industrial action as it fears that a partnership with Fiat would bring significant job cuts for Opel's 26,000 strong workforce in Germany, because it considers Fiat to be in bad shape.

"Even the strongest child can't bear two sick parents," said Opel supervisory board member Armin Schild, who is also the head of the union's Frankfurt section. GM is considering holding on to a stake in Opel. But Schild said that together, GM and Fiat would put Opel's future on the line again, after sales have recovered recently, "because Fiat is sitting on dramatic overcapacity."

Opel ran into liquidity troubles after GM struggled to live up to payment obligations and issued promissory notes as payment obligations to its subsidiary. Germany's government said it could step in with possible state guarantees after it became clear that GM's European operations needed around EUR3.3 billion in guarantees to survive. But Chancellor Angela Merkel tied any possible state help for Opel to finding a new investor for the company.

Analysts pointed to Fiat's liquidity position, which suggests that Fiat would be unable to stem a possible investment without government guarantees.

"Fiat's liquidity is relatively tight with EUR5.1 billion in cash and marketable securities but EUR6.0 billion in cash maturities in the next 12 months...and no available committed lines," said Automotive Credit Analyst Sven Kreitmair at UniCredit in Munich.

IG Metall Thursday fiercely attacked Roland Berger, who represents the government in the effort to save Opel, and also sits on Fiat's board of directors.

The union said the federal Economics Ministry, headed by Karl-Theodor zu Guttenberg, had forced Opel to accept Berger, despite questionable loyalties.

"This is outrageous in the light of the current development," said Schild, as it appeared that Berger had brokered the deal to the advantage of Fiat.

Berger couldn't be immediately be reached for comment and the ministry only provided a rather scant one, not directly touching on Fiat's potential interest.

"The federal government is in talks with various interested parties without prejudice," Minister Guttenberg said, according to a statement received by e-mail. "The talks center around a sound perspective for workers and the company."

Opel, which is also offering a range of smaller and medium-sized fuel-efficient cars, was among the strongest beneficiaries of Germany's fiscal stimulus packages, which entailed a EUR2,500 scrapping incentive for old cars.

Existing Home Sales Drop In March

On Thursday, the National Association of Realtors reported existing home sales in March fell short of expectations, dropping 3.0% to 4.6 million units, below the downwardly revised level of 4.7 million in February, and 6.1% lower than the March 2008 reading of 4.9 million.

The market's activity has been highly influenced by the government's efforts to relieve the industry by lowering borrowing rates and providing incentives for first-time buyers such as the $8,000 tax credit.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, Texas, said first-time buyers are crucial at this stage of a housing recovery. Thus far, they have been driving the market, as an NAR practitioner survey in March showed first-time buyers accounted for 53.0% of transactions, based largely on contracts offered before the tax credit became available.

Teasing out the line between authentic demand and government intervention is difficult, and even irrelevant. "These are real things and are likely to fuel additional demand," argued Forbes Guru John Buckingham of The Prudent Speculator.

"I'm not entirely sure there's a clear distinction because if you sell a house, you sell a house," quipped David Wyss, chief economist at Standard and Poor's.

Though sales appear to be stabilizing, prices are a different matter. "You have to take the figures with a grain of salt, but I think we're starting to see early signs of stability," said Buckingham. "I don't want to say prices have stopped falling, though the rate is slowing."

Wyss concurred: "My personal feeling is we've probably hit bottom in terms of sales," he said. "That doesn't mean homes prices aren't going to continue to decline, because there are a lot of unresolved issues."

Although prices rose from February to March, the NAR reported the national median existing-home price for all housing types was $175,200, down 12.4% from March 2008. The price increase from February to March was 4.2%, which is much higher than the typical 1.8% increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20.0% less than traditional homes.

Meanwhile, on Wednesday, the Federal Housing Finance Agency reported prices of U.S. single-family homes rose by a 0.7% in February from January but were down 6.5% from a year earlier.

Among the "unresolved issues" that concern Wyss is concealed inventory, due to banks delaying foreclosures or people not putting their homes on the market. He doesn't expect prices will hit their low until the first quarter of next year, adding that housing starts will probably not pick up until that point.

Star analyst Meredith Whitney warned home prices will fall by more than 66.0% of current bank assumptions in the 10-City Case-Shiller Index. (See "Whitney: Bank Losses Through 2010.") "Increased liquidity drove home prices higher," Whitney explained, "and contracting liquidity will drive home prices lower." She pointed out that 70.0% of homeowners need leverage to buy and stay in their homes, therefore an overall declining mortgage market will put pressure on prices.

The market is also being pressured by nation's eroding labor market. Aside from the increasing number of Americans out of work, countless others who are employed are standing on the sidelines on the fear they might get the ax. "People can afford a home, but are afraid due to job security," Buckingham said.

Incidentally, the U.S. Labor Department reported Thursday initial jobless claims rose more than expected last week, while the number of workers continuing to filing claims for unemployment benefits topped 6.1 million, setting a record for the 12th straight week. The report provides further indication of the persistence of layoffs and weak job market.

Buckingham is optimistic about the housing industry's future, at least in the long-term. "We're not going to go back to the hay-day of the early 2000s, but people need a roof over their head," Buckingham said.

Looking long-term, Buckingham's favorite stocks are DR Horton, as well as KB Home and Toll Brothers, though he added for new purchases, he would prefer to buy them 15% to 20% lower.

Did Bernanke Bully BOA?

A new report by the New York Attorney General says that government officials bullied Bank of America Chief Ken Lewis into accepting a merger with Merrill Lynch--then ordered him to keep mum about losses at Merrill.

What's at stake? The integrity of the government's bailout actions, for one. Federal Reserve Chairman Ben Bernanke's reputation, for another. And of course Lewis' job.

Thursday, New York Attorney General Andrew Cuomo released documents charging that in December former Treasury Secretary Henry Paulson pressured Lewis into accepting the merger or risk a management shake-up at Bank of America. Lewis was hesitant about the merger because Merrill's projected fourth-quarter losses had jumped from $9 billion to $12 billion in just one week. They eventually topped $15 billion.

Equally as important, Lewis didn't make Paulson's threat public, nor did he tell Merrill Lynch or warn shareholders about the staggering losses. According to a letter to lawmakers and regulators, Paulson and Bernanke told him to keep mum.

"I was instructed that 'We do not want a public disclosure,'" the letter quotes Lewis as saying.

Federal Reserve officials didn't return a request for comment. Neither did a spokesperson for Paulson, who has taken up residence at Johns Hopkins University's School for Advanced International Studies. Don't be surprised if both men are soon called before Congress to testify about their actions.

It's not yet clear if any of this behavior was illegal. Paulson is out of government now, so his role going forward is limited. But the news could seriously damage Bernanke's credibility if he's seen as prodding a bank to accept a questionable merger and urging bank officials not to disclose important information about it. The Fed chief has developed a reputation as someone who's brought more transparency to the inner workings of the Fed. Recently he even appeared on the news program 60 Minutes to explain the government's response to the financial crisis.

Finally, there's the fate of Lewis to consider, and some are already using the report by Cuomo's office, first reported by The Wall Street Journal, to call for the Bank of America boss' head. The Change to Win Investment Group, which works with union-sponsored pension funds, is urging shareholders to vote out Lewis and several board members at Bank of America's annual meeting April 29.

The news "underscores why Bank of America needs a CEO and board of directors that will put the interests of shareholders ahead of their own interest in self-preservation," the group said in a statement.