MySpace, rise and decline

The first major social network created before Facebook, allows users to open and custom a personal space where they can express their ideas through a blog, share pictures or videos, and create a network of friends on the Web.

It was inspired by the Friendster site created in 2002 in California, and that since became a predominantly Asian site. The domain myspace.com had been registered earlier to be a hosting site, and was reused in 2004 for the social site.

Comparison of traffic of MySpace and Twitter

Evolution of the traffic according to Google Trends for Websites (12/2009): Soon an overtake?

Update: February 2010

Myspace resists!

Update: May 2010

Some key data in 2009

Number of employees: 1000.
Number of accounts: Over 200 million but a lot is unused.
Number of visitors: 2 million per day in January 2009 according to Compete.

The rise

The site was founded in August 2003 by Chris DeWolfe and Tom Anderson. His rise is rapid and in 2005 he became the fourth most visited website in the world. He inspired Facebook, created by 2004.

In July 2005, the company News Corp buys Intermix for 580 million dollars. Robert Murdoch, owner of News sought to invest in the Web, the company rising seemed a good opportunity, and he was not wrong. It allowed him to make great profits. But we'll see how to force to press the lemon, it eventually lead to a gradual decline of a success story.

In August 2006, an agreement was signed with Google, against 900 million dollars, both assigning advertising space and make it the search engine of the site. It uses user profiles to target advertising based on their tastes and habits, and maximizes revenue...
The Google executives arrive by helicopter at Pebble Beach to sign the agreement, and among the guests, there was Tony Blair. Other advertising companies including Yahoo! and Microsoft were caught short.

Within 15 months of the acquisition, revenues go from 1 to 50 million per month. Local sites were opened in several countries.

Widgets provided by third party companies to add functionalities made the fortune of them. Youtube has enjoyed success from 2005 with a widget for MySpace!

The controversy

Opposition arose to the site for several reasons. Its owner, Murdoch, motivated primarily by advertising revenue is very controversial.
Is criticized too a false relational aspect for artists who seem aim by establishing a wide network but expect mostly advertising revenue.
The site signed in 2008 a trade agreement with music majors that will receive compensation even though most of the works put on-line come from small independent artists not connected with these firms.
It was revealed that the age of Tom Anderson had been lowered to make it closer to the young: so the fake profile was born with one of the founders of the site itself!

The decline

In April 2008, Facebook has joined MySpace in unique visitors (according to Comscore) and since has grown steadily while MySpace is on the downslope.
In the U.S., MySpace abandons the first place to Facebook in May 2009.
Murdoch's gamble to achieve 1 billion in revenue in 2008 is not reached, and since they are constantly decreasing.
40% of staff were dismissed. Expected loss of 100 million dollars in 2009.
The founder DeWolfe left in 2009.

MySpace has been sold to Specific Media in June 2011 for the amount of $35 million. The singer Justin Timberlake would have take shares, after having been actor in the movie The Social Network that tells the story of Facebook.

Causes of the decline

One of the qualities of the site was its ability to respond to requests from the community and add functions or modify the site based on new needs.
But the inclination of the new owner to maintain a large advertising area came thwart this ability. They have to remove pages that are unnecessary steps and as Facebook has done, use Ajax to simplify the interface.
Reducing the number of pages meant to reduce the advertising space. This was against the objectives.
Users could compare the weight of the site with the simplicity of competitors, and disgruntled began to massively desert MySpace.

MySpace has decided to finally use Ajax, but too late, and it is the same with all other improvements: added only months after the competition and seeing that they attract many users, but users are already gone!

MySpace hired a former head of Facebook, Owen Van Natta, hoping to reverse the trend. And the suspense remains: Twitter will it surpass MySpace of does the second will be back on course?

References and links