Myspace Sold to Specific Media (+Justin Timberlake) For $35 Million

MyspaceThe fall of Myspace over the past five years has been rapid as Facebook, LinkedIn, and Twitter have come to dominate the social networking space – each with their own focus. Facebook in particular has conquered much of the world with 750 Million active users, which is about a fifth of the world’s population (see graphic below), leaving little room for MySpace – the leading social network back when Rupert Murdoch’s News Corp acquired the site for $580 Million.

Some news organisations claimed that News Corp had got the deal of the century for Myspace, but it appears they overpaid by $545 million, or at least ran the network into the ground when they acquired ownership. Myspace led the social networking space back in 2006 because teens could show their individuality (read: garish backgrounds and auto-playing music), and easily interact with friends. It also had no rights management for the music on the site meaning that it enabled both widespread copyright infringement and both new and established acts to interact more directly with their fans. Myspace was the first stage of social engagement between “celebrities” and fans, as well as one of the earliest social networks between peers (but not the first by a good margin).

So what went wrong?

News Corp acquired the site and immediately focused on monetisation rather than offering new services to users or improving the notably poor legacy coding that the site was built upon. Independent 3rd parties made html/css hacks to give users the option of making their pages look more professional, but Myspace never cottoned on to this desire amongst its userbase that were starting to go off to college giving Facebook a way in. Myspace also did little to nurture either the music fans or the bands themselves on the service as Myspace Music took forever to materialise and music that was previously downloadable became stream only. Yes this avoided copyright infringement issues – but Myspace gave no thought to the bands that wanted to give away a few of their songs as promotional material.

News Corp bought a site that was synonymous with the digital social interactions between teens at the time (the first digital generation) and with the rapid growth in possibilities for smaller bands to find an audience. They did not invest in the code or design of the site to allow grow up with its users, and it prevented bands using it the way they wanted to to get noticed. They let spammers cover everyone’s wall with little moderation, and took far too long to embrace digital photography which remains one of facebook’s killer features. Even when it was obvious that users were migrating en masse from Myspace to Facebook, Myspace responded by trying to squeeze more money out of its remaining userbase by putting ads over the music streaming player, and auto-playing audio ads on band profile pages – giving bands a reason to move to Bandcamp.

At no point did News Corp invest in its userbase, but instead simply saw them as a commodity that could be exploited. They bought the biggest and most important social network at the time and ran it into the ground in just five years by never grasping the benefits of social interaction – forgive me if I give little credence to any plans for News Corp to embrace digital with any of its numerous brands.

Specific Media have picked up the site for a reported $35 million, with Justin Timberlake involved in the strategy and creative direction of the site in the future – although his personal stake in the company is unknown. With news Corp out of the picture and the debt of the site considerably reduced, Myspace could return as a competitor to Bandcamp, or even services like Netflix – but at this point all we know is there will be a drastic change in direction.

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