So what happened to social media giant MySpace? Can you still remember having a MySpace account?
Back during the glory days, between 2005 and 2008, MySpace had reached its peak. In 2006, the 100 millionth user joined. In 2007, the network was valued at 12 billion US dollars.
The concept of MySpace was simple yet very attractive. Basically you have an international social networking website offering you interaction with other users. You can make friends, share videos and photos, send messages and comment on your friends’ status. MySpace was also big in the music scene. Bands can create their own profile and upload their songs so that users can listen to the bands’ music for free. MySpace was the big thing in social media.
However, in 2008 main competitor Facebook overtook MySpace in membership rankings. MySpace’s popularity decreased, the network lost its relevance in the market. Still there might be some hope. Just recently, MySpace has recorded one million new accounts within one month.
To understand the development of MySpace let’s take a look back to the beginning.
In 2003, MySpace was created by eUniverse employees, the project being led by Tom Anderson. eUniverse was an internet marketing company. They liked the concept of friendster, a social gaming site. So they developed their own social platform, stressing the social network aspect. Just like many other websites, MySpace generates its revenues by advertising. Companies pay MySpace for publishing their ads on the network.
As the network increased in popularity, Rupert Murdoch’s News Corporation, the parent company of Fox broadcasting and other media companies, bought MySpace for 580 million US dollars. MySpace recorded an intense rise in user accounts, up to 230.000 users a day.
As pointed out before, MySpace was very popular for its role in the music scene. Bands created profiles, fans could add the bands as their friends and get all the news and music. This feature was one of the main reasons for MySpace’s early success.
In August 2006, MySpace reached an agreement with Google allowing Google to integrate Google Search and Google AdSense into MySpace. Google AdSense is a provider of ads on websites that do not belong to the Google network. MySpace got at least 900 million US dollars between 2007 and 2010 for that deal.
In January 2011, MySpace announced to displace 500 employees. In June 2011 the News Corporation sold MySpace to California based company Specific Media for only 35 million US dollars. Just remember: In 2007, MySpace was valued at 12 billion US dollars.
Furthermore, pop star and actor Justin Timberlake was announced to be the co-owner of MySpace. With new CEO Tim Vanderhook, he is working hard to improve the image of MySpace and make MySpace significant in the market again.
Reasons for the decline of MySpace can be seen in various strategic mistakes. Before News Corporation took over MySpace, the social network focused on creating technologies that would keep users and attract new users. After the purchase, they had the focus on increasing revenue. Further, MySpace developed features that did not meet the interests of their core users whereas Facebook did the right thing. They kept on developing features that actually offered a value for their users. An overflow of adverts on MySpace and exhausting redesigns added to MySpace’s loss of users.
But there is hope. Each day MySpace records 40.000 new users. The main reason for this can be seen in the new music player and its successful integration into Facebook since December 2011. Justin Timberlake plays an important role in the strategic development of MySpace. In January 2012, MySpace has announced a collaboration with Panasonic to create MySpace TV. The app will run on Panasonic’s Viera HDTVs. Users of the app can then share a social TV experience, meaning watching TV, commenting and surfing at the same time.
The battle for innovation in social media is going on.