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For those of you living under a rock, Myspace was setup by entreupreneur Chris DeWolfe, and later sold to News Corp in 2005 for $580 million. At the start of social networking a couple of years back, Myspace was a forefront market leader, and users flocked to setup profiles and communicate between each other using it. It had its roots firmly planted in online music, and their is barely a single profile which doesn’t have some mention or embedded music player.
All of that changed as the landscape of the web changed and evolved, nimbler competitors such as Facebook appeared and now Myspace is leaking users, and marketing dollars left right and centre. Last week they significantly announced two developments. DeWolfe was outsted in favour of News Corp’s own management team, and they announced a 30 percent cut in staff.
In order for social networking sites to survive – they face the delicate balancing act that is ramping up their membership as fast as possible—with the need to experiment with ways of raising money to fund long-term growth. If they push too hard for revenue in the short term, as is the case with Myspace, the pieces of the puzzle start to fall apart. Too little time spent improving its online offerings, allows competitors to sideswipe you.
When it started, Myspace was a web 2.0 geocities. Users could adjust their pages as they wanted, creating hideous monstrousities such as this, and this. This was a strength at the start, and coupled with identity production helped generate a certain amount of buzz amongst their audience.
Control is not always a good thing, and in my mind this has tarnished their brand somewhat, and staved their target audience to a younger generation. Not to mention the fact that Facebook’s UI is uniform, and gels much better with its users.
Many people have a preconceived notion that Myspace is fugly. As a result many original Myspace users are growing up, and moving on, to something a bit more sophisticated. i.e. Facebook.
Myspace were one of the first sites to use email to grow. When you signed up, your inbox was harvested for potential other people to invite. Friends invited friends and so on. This is known as viral growth.
Whilst Myspace reached a peak with this, Facebook realised that instead of being just another social networking site, they needed to become a platform. The benefits of this move were two fold. Firstly the API attracted developers onto the site. Exposure to Facebook’s growing audience was offered in exchange for not only User generated content – but user generated applications. Facebook didn’t have to pay anyone to create games, and applications, and a new way to tap into viral growth was created. The applications gained access to a send to friend feature that developers could utilise.
Myspace later followed with a “me-too” offering but in this case, it was the early bird which caught the worm, not the second mouse which gets the cheese.
Myspace knows that it couldn’t launch business pages. The audience just wouldn’t be interested in communicating with brands on their platform. Facebook however spans a couple of generations and has done so elegantly. Getting businesses interested in your platform firstly, hooking them up and finding how to generate revenue, is always going to trump chasing advertising dollars from 15 year olds.
Not enough innovation
As I mentioned earlier if social sites such as Myspace sit on their laurels without offering their existing userbase, new and interesting entertainment, they are likely to take their conversations elsewhere. It is widely believed that Myspace will return now to its traditional roots in entertainment.
The problem with someone like News Corp muscling in and taking over, is that by and large have a poor understanding of the web, in my opinion they’ll be even more out of touch with their users now that DeWolfe has left.
In my opinion, there’s only one way to prevent Myspace from going the way of the dodo, and that is to attempt to connect further with music. Myspace’s saving grace is the fact that it has launched bands such as The Artic Monkey’s, Lily Allen and others. The Myspace music store, appears to be the only way they will likely survive. They won’t however, win the race against Facebook, and are much more likely to diversify in the future.