MySpace failure

MySpace

Social network based on personal user pages

Description

MySpace was originally launched as a side project. Started as a spin-off of Friendster, it grew rapidly to become the most popular social networking site before Facebook entered the scene. It gained 1 million users in about one month after it was officially launched in 2004 and by 2005 it had 20 million registered users. Upon registration on the site, users were given profile pages they could personalize, write posts or blogs, connect with others through comments or messages, share art, stream their own music or that of their favorite artists. The platform principally made profits by serving ads to its users which reached about 76 million in 2008.

Stats

Category
Social Media
Country
United States
Started
In 2003
Closed
Active
Number of Founders
Seven
Name of Founders
Aber Whitcomb, Brad Greenspan, Chris DeWolfe, Colin Digiaro, Josh Berman, Michael Addicott, Tom Anderson
Number of Employees
Between 251 And 500
Number of Funding Rounds
1
Total Funding Amount
$37.8M
Number of Investors
2
Precise Cause of Failure
Multiple Reasons
Business Outcome
Still Active

Cause of Failure

MySpace was founded by people in the industry and marketing sector and their perspective of the platform was since the beginning very different from that of Facebook, which nevertheless became its primary competitor. MySpace tried first to ignore Facebook, then to copy it and lastly decided to repurpose itself as a platform for artist and musicians.

There are several reasons why it’s thought that MySpace lost to Facebook. Starting from its poorly organized interface to the often-faulty technology and applications on the site, it was clear that although MySpace had a superb marketing strategy, from the technical side they were way behind other platforms. They later tried to remedy these problems by offering a cleaner design and allowing third-party companies to provide applications for the site.

Since MySpace revenue source was ads serving, it was pressured by investors and partners into taking an aggressive ad publishing strategy, which made their pages even less attractive to users.

In 2010, it’s estimated that 50% of MySpaces users simply left and discontinued their use of the site and that continued as the once popular site kept changing ownership and direction every few years.

Besides buggy technology and poor management, the company also faced public image issues when the site started being associated with dubious or even scandalous figures thus alarming parents and earning MySpace negative press coverage. This only accelerated users flock to other platforms such as FB that offered the additional incentive of providing users with news and interactions related to their real-life friends as opposed to anonymous people.

MySpace is currently active and receives an estimated 15 million visitors per month as of 2016 (for comparison, Facebook has 2.07 billion monthly active users), currently has 53 million songs on the platform and an average of 13 thousand songs uploaded every day on the platform.

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