As an experienced technology industry analyst, I‘ve long been fascinated by seminal moments in internet history. And few stories capture the public imagination more than the rapid rise and even faster fall of MySpace last decade. For those who didn‘t experience it firsthand, let me guide you through the key decisions and environmental factors that took MySpace from the top to the bottom in just a few unbelievable years.
MySpace Takes Flight (and the World Takes Notice)
Before we analyze where MySpace went wrong, it‘s important to understand the unique set of circumstances that fueled its incredibly swift ascent. Founded in 2003 by a team of online marketers led by Chris DeWolfe and Tom Anderson, MySpace actually grew out of parent company eUniverse‘s user base of over 20 million subscribers.
Leveraging eUniverse‘s resources, the MySpace founders had an instant audience to recruit members from at launch. Tapping into surging social media trends piloted by predecessors like friendster and exploiting deep ties to the music industry gave MySpace immediate traction.
| Date | Milestone |
|---|---|
| Aug 2003 | MySpace founded |
| Dec 2004 | 1 million users |
| Jul 2005 | Bought by News Corp for $580 million |
| Apr 2006 | Overtakes friendster as largest social network |
| Jul 2006 | 100 millionth account created |
| Jun 2008 | Overtaken by Facebook in monthly U.S. visitors |
| Feb 2011 | Traffic has dropped 75% from peak |
| Jun 2011 | Sold to Specific Media for $35 million |
Like wildfire, MySpace took off. Leveraging a core audience of musically-inclined teenagers and young adults, it grew faster than any social media platform previously. Its peak came in April 2008, boasting over 100 million active monthly users globally, a staggering $12 billion valuation and an estimated $1 million in daily advertising revenue. Celebrities like Tila Tequila springboarded from MySpace fame to mainstream stardom.
For a brief, brilliant moment, MySpace was social networking and embodied the zeitgeist of youth culture for an entire generation.
So with that kind of meteoric success and global dominance, where exactly did things go so wrong?
The Rot Spreads from the Inside
While competition from Facebook and other external conditions played a role, several crucial management missteps after MySpace‘s acquisition by News Corporation in 2005 served to weaken the site‘s foundations at the worst possible time.
News Corp CEO Rupert Murdoch installed his Fox Interactive Media division to oversee MySpace. But lacking clear leadership and strategic vision, chaos soon reigned. Organizationally "it was a disaster" said former MySpace International VP Travis Katz to TechCrunch. Between 2005 and 2010, MySpace shuffled through 3 different CEOs.
The last CEO, Owen Van Natta, a Facebook veteran, left after just 10 months due to clashes with News Corp leadership over the site‘s direction. This management instability at the top trickled down, hampering product development and operational efficiency.
These internal dysfunction issues compounded mounting external threats to MySpace‘s dominance, setting the stage for its shockingly abrupt downfall.
The Danger Outside the Walls Draws Near
While Rome burned from within, barbarians gathered at the gate. Well one barbarian actually — Facebook. Launched in 2004 by then college student Mark Zuckerberg, Facebook remained largely campus-focused for a few years, not registering as a threat.
However, shortly after Van Natta exited News Corp in late 2009, Facebook overtook MySpace in monthly active users for the first time in the U.S. By relentlessly focusing on service stability, simplicity and aggressive innovation, they had adapted more nimblely to what users wanted in a modern social experience.
Industry analysts marked Zuckerberg declining a $750 million buyout offer from Viacom in 2006 as an early turning point. At the time MySpace was still wildly successful and dominant — how galling that rejection must sting Murdoch in retrospect.
Meanwhile, other demographic and technological factors were eroding MySpace‘s foundations. Its core user base of teenagers literally aged out of the platform‘s relevance and fled to ‘cooler‘ pastures. Mobile device usage began skyrocketing this decade as well — an area where clunkier, desktop-centric MySpace continually lagged behind Facebook‘s more responsive adaptability.
Per Mashable, former MySpace SVP Dan Porter emphasized how missing this crucial transition impacted MySpace greatly:
"We didn‘t move fast enough to adapt to where social networking was going, which was more mainstream audience on mobile devices."
By late 2010, MySpace traffic and ad revenue had cratered so dramatically that drastic measures became the only option…
From Dominance to Afterthought in 2 Years Flat
The numbers are staggering — over 100 million monthly users at its apex in 2008 down to less than 40 million by 2011. From the world‘s hottest tech property to an afterthought being sold for pennies on the dollar in what many consider the most dramatic rise and fall the tech world had ever seen.
In June 2011, Specific Media purchased MySpace for just $35 million, a fraction of a percent of its peak billion dollar valuation just a few years prior. Once holding the mantle as both the #1 global social media platform and the most visited website in America, MySpace would now become merely a footnote in the history books.
Ultimately MySpace showed how even the most dominant online platforms are never immune from disruption, especially if product innovation and strategic vision falter. For generations of young people coming online during its heyday, MySpace seemed like it would be at the center of social networking forever.
Yet the internet graveyard continues to grow, with new favorites constantly rising up to take the place of yesterday‘s giants. MySpace may have blazed the trail initially, but the entire saga stands now as a cautionary tale on adapting properly to ever shifting digital tastes.
