As Young Academic‘s Tom Chandler has investigated, MySpace has reportedly lost over 10 million users between the months of January and February this year and is now down to 63 million unique users. This is compared with the 95 million users on the site this time last year, read this fascinating column to discover why.
Last November, MySpace announced that it would be fully converging with Facebook, prompting many critics to label the move as an acknowledgment of defeat, in face of Facebook’s dominant position in social networking.
“The company also announced 500 job cuts in January, adding to the 29% of the MySpace workforce who were made redundant last summer”
MySpace, founded in 2003, has seen a steady decline in users since Mark Zuckerberg’s Facebook gained mainstream popularity in 2008, and has struggled to promote features that might attract new users to the site.
November’s MySpace/Facebook integration known as “Mash Up with Facebook” intended to bring new revenue to the site, but with the media labelling the move as a hopeless last attempt to bring the site back to its former days as the number one social networking site, it would seem that MySpace is nearing the end.
Originally founded by several ‘eUniverse’ employees in August 2003, and was based around Friendster (which at the time, was the most popular social network).
MySpace gathered momentum, and its potential for making revenue developed as millions of users quickly signed up.
In 2005, MySpace and its parent company Intermix Media (formerly eUniverse) was bought by News Corporation, Rupert Murdoch’s company, which also owns Fox Broadcasting and bSkyb. News Corporations paid 580 million dollars for MySpace.
MySpace had over 100 million users by late 2006, and was the leading social network. Its use of ‘moods’, comments, and connections made the site unique.
Site users were also allowed to edit the HTML/CSS of their profile, allowing for customization that to this day, still has not been duplicated by any other social network.
Its focus on music was also an attraction to new users, and is now the main focus of the company, bands and individuals can sign up for a Myspace Music profile, where songs can be uploaded for free. The site allows musicians to promote themselves, and sell or share their music.
After News Corporation bought the site, they launched ‘MySpace Records’ , with a focus on discovering new talent in users who had profiles on the website.
An estimated 8 million artists are on MySpace music, and although popularity has dipped, MySpace music is still a well established music source, with users still signing up for the service. The Facebook merger could still have the potential to add more users to MySpace Music, as the ability to upload and share music on MySpace arguably trumps the features of ‘Facebook’.
MySpace continued to top the social network leagues into early 2008. Then, after Facebook revealed new features, and content, in the summer of 2008, MySpace began losing users.
As MySpace focused more on music, and stuck to the features that had made it popular, Facebook underwent regular change, and has been steadily adding new features to the site since 2008.
But in 2007 MySpace was the giant of the social networks, and drew acclaim from technology critics.
The surge in popularity prompted Guardian writer Victor Keegan to write ‘Will MySpace ever lose its monopoly?’, Keegan’s articled labelled MySpace a “natural monopoly” and noted that MySpace’s advertising revenue would keep the website alive, also adding that MySpace’s dominance would survive based on the amount of users on the site. (Victor Keegan article @ http://bit.ly/eTzx8B)
Keegan said, “It is easy to change search engines, even if it is Google. But if you change social networks you not only have to move all your videos, audios, messages, photos elsewhere but you also lose your network of friends unless they migrate with you. MySpace won’t make that easy”
But by 2009, Facebook had gained more users than MySpace, and the site seemed to be rapidly declining, which led Wall Street mogul Henry Blodget to say “MySpace might actually be worth next to nothing”. (Henry Blodget article @ http://read.bi/hzWSnU)
And despite a major redesign which became the first example of the company’s shift towards content, the situation worsened when Owen Van Natta the chief executive of MySpace, stepped down on February 10th 2010. Mike Jones then became chief executive of MySpace.
Rumours circled about News Corp and how they were looking to offload MySpace to the highest bidder. This stemmed from comments made by Chase Carey, the chief operating officer of News Corp, when he told a media conference ‘There are opportunities here (at MySpace) to do twenty things but that doesn’t mean you’re going to do any (of them). If there’s something there that makes sense you ought to think about it’
‘We need to deal with this urgently’
News Corp’s management group labelled MySpace “a problem”. (Comments by Chase Carey @ http://bit.ly/eG2oNK)
This marked an even bigger push by MySpace to market their content.
And on the 14th of November 2010, Mike Jones told The Telegraph, “MySpace is not a social network anymore. It is a social entertainment destination”. (Mike Jones telegraph interview @ http://bit.ly/f5Ila6)
MySpace underwent another redesign (and a new logo, which is now the word ‘My’ followed by an extended underscore for ‘Space’). (Example @ http://bit.ly/f4ngeR)
Jones admitted that there were problems, but said that “there is not a timeline to shutdown MySpace”.
MySpace announced the Facebook ‘mash up’ 5 days later.
Despite the heavy criticism that the Facebook merger received, there has been a subsequent debate concerning what MySpace should do next.
David Card in an article titled ‘How to make MySpace relevant (again)’ agreed that MySpace should not try and compete with Facebook.
Card states that ‘It can still be a valuable consumer media business, if not a technology driver’.
And goes on to explain that MySpace should be focusing on new advertising methods, social commerce (such as selling merchandise on an musicians profile), and outbound syndication (such as ‘foursquared’ where users can ‘check-in’ to places they visit, and it appears on their MySpace profile). (David Card article @ http://bit.ly/haFlJp)
Adam Ostrow editor in chief of Mashable, one of the internet’s largest technology news sites agreed that MySpace still had potential, and said that MySpace remained ‘Huge by standards’
‘MySpace is an example of how corporate ownership slows innovation, which spells death in the fast-moving realm of Internet Technology. MySpace’s innovative spirit largely died when News Corp bought the site in 2005’ he said.
‘News Corp really came in and focused heavily on monetization (of the site), but perhaps, in retrospect, it was really at the sacrifice of growing the community’.
Writer for TechCrunch M.G Siegler also discussed the shortcomings of MySpace and said “To stage a comeback MySpace would have to do something “completely outside of the box”.
In 2009 Jon Gibs, vice president of media analytics for Nielson Online put forward the argument that MySpace might not be the only casualty of the social networking age, as he claims the life cycle of a social network is less than two years.
“Facebook, as sort of an important thing in people’s lives, is probably less a year and half old. And people are already out there saying ‘Well, Facebook’s passé, and Twitter is the thing to do now’ And before that, it seemed like MySpace had maybe a two and a half year window”
Gibs says that there will always be a new social network that will look to take the majority of users away from the leading site.
Gibs also pointed out that there might not be a need for social networks in the future, as technology may overcome the need for them. (Information from Gibs, Siegler, and Ostrow @ http://bit.ly/dVW3ca)
Josh Halliday, technology writer for The Guardian, said “(MySpace’s) new direction is a brave move, whether it will be enough to revive (MySpace’s) fortunes remains to be seen. It’s a matter of whether News Corp has patience. November’s Facebook tie-up was probably more significant than it appears”
David Hassall, web developer, was enthusiastic about the futures of social networking, and said “There is a lot to look forward to. MySpace was popular, but it had its time, and then Facebook came along, and I can’t see a MySpace comeback ever happening, their new focus on social entertainment is already being provided by countless other websites”
“In three years we might be saying the same thing about Facebook having its time, then Twitter coming along and taking its spot. Users are constantly shifting their interests onto other networks, and some people have started using Twitter and Facebook simultaneously. ”
“Twitter is simple and I think its features are inviting to people coming over from Facebook, who are tired of ‘Likes’ and ‘Groups’. Facebook isn’t declining, but it I wouldn’t be surprised if we’re not hearing much about it in three years. But at the same time, it might be the social network that defies the precedent set by MySpace and Friendster”
Hassall noted that technology would be the defining feature in what comes next in social network features.
“Gowalla, Foursquared, and Facebook Places are now using a check-in system through a user’s mobile application. If these websites can start making big money from these features, mobile might be the new platform where networks start focusing their attention on, so we might see new developments that aren’t just limited to commenting, photos and videos on a mobile platform”
Facebook currently has the most active users on its website, with over 500 million regularly logging on to the website. It is currently the second most visited website on the internet. (Alexa rating @ http://bit.ly/hjsgyv)
190 million people have now signed up for a Twitter account, which makes it the second most popular social network website, the website’s visiting traffic has made it the ninth most visited website on the internet. (Alexa rating @ http://bit.ly/eWOoe5)
MySpace’s internet traffic has dipped from almost 100 million unique visitors per month to less than 50 million, in the space of 2 years. It is currently the 70th most visited website on the internet. (Alexa rating @ http://bit.ly/hbGJwj)
Facebook’s annual revenue is estimated at $800 million, making it the biggest earner of all the social networks. Twitter is said to have made $150 million in 2010.
MySpace’s estimated revenue for 2009 was $385 million, with reported operating losses at $156 million, estimates for 2011 see MySpace’s revenue continue to fall to under $200 million. (Estimates @ http://read.bi/ekyLE7)
News Corp is still reportedly exploring their options in regards to MySpace, with Reuters reporting that News Corp have approached Vevo with an offer that would give the video giant control of MySpace. (Reuters article @ http://reut.rs/eOQvMZ).