Month: March 2006

The Acquisition

In July 2005, News Corp bought MySpace for $580 million. BBC News wrote then:

The central message was that the days of newspapers editing content into a one-size-fits-all package to be consumed without question by the reader were numbered.

Young people “don’t want to rely on a God-like figure from above to tell them what’s important,” Mr Murdoch said.

“And to carry the religion analogy a bit further, they certainly don’t want news presented as gospel.

“Instead, they want their news on demand, when it works for them. They want control over their media, instead of being controlled by it. They want to question, to probe, to offer a different angle.”

Myspace fits neatly into that definition. It is a network of pages – most set up by individuals, some by musicians and other creative types – each mixing self-generated text and pictures, links to other content elsewhere, and streamed music and video to create networks of friends and contacts.

The result is a densely interwoven community, which its adherents say is highly addictive.

Robert Young analysed the purchase of MySpace by News Corp:

Although ad inventory was surely part of the equation, I believe there is larger strategic reason that motivated Murdoch to make such a bold move: He is planning to create a competitor to MTV.

Much like Viacoms CBS decided to use the broadband web to bypass cable and compete against the 24-hour news networks like CNN and FoxNews (see PaidContents coverage here), the acquisition of MySpace positions Murdoch to challenge the dominance of MTV in their category. Im willing to bet that he will go even further by eventually extending the MySpace brand to include a dedicated cable & satellite network/channel. He is after all an old media guy. In fact, just a couple of weeks before News Corp. announced the deal, we all witnessed the webs potential in this context when AOLs webcasting audience for Live 8 outreached MTV and ABCs ratings of the same event (details here.) Such a data point can go a long way towards justifying a $580 million price tag.

In addition to live concerts, MySpace is an ideal platform to release music videos (which the major record labels are desperately trying to monetize), as well as other short-form reality programming (think Foxs American Idol) thats likely to attract the 22 million youngsters in the MySpace community an audience that happens to also watch MTV.

MySpace has helped catapult News Corp and Murdoch in the forefront of the Internet revolution. Going ahead, the challenge for them is to keep the spirit and community features that helped MySpace succeed even as they monetise the brand and the user base.

Tomorrow: The Future

What made MySpace succeed where others failed? Robert Scoble spoke to MySpaces CTO Aber Whitcomb who pointed out the reasons:

1) They made sure influentials in Hollywood (stars, bands) were among the first users.
2) They listen to their users and add features frequently (usually noticeable new features every week).
3) They let the users tell them what to do. He mentioned that other services, like Friendster, tried to tell their users what not to do.
4) When MySpace visitors first log on they already had a friend: the founder Tom. That was in contrast to other services where you had to work to find your first friend. His page also gave you a template to get started.

Danah Boyd analysed the MySpace phenomenon in a talk recently:

I have been following MySpace since its launch in 2003. Initially, it was the home to 20-somethings interested in indie music in Los Angeles. Today, you will be hard pressed to find an American teenager who does not know about the site, regardless of whether or not they participate. Over 50 million accounts have been created and the majority of participants are what would be labeled youth – ages 14-24. MySpace has more pageviews per day than any site on the web except Yahoo! (yes, more than Google or MSN).

MySpace is a social network site. In structure, MySpace is not particularly unique. The site is a hodgepodge of features previously surfaced by sites like Friendster, Hot or Not, Xanga, Rate My Teacher, etc. At the core are profiles that are connected by links to friends on the system. Profiles are personalized to express an individual’s interests and tastes, thoughts of the day and values. Music, photos and video help users make their profile more appealing.

The friend network allows people to link to their friends and people can traverse the network through these profiles. An individual’s “Top 8” friends are displayed on the front page of their profile; all of the rest appear on a separate page. Bands, movie stars, and other media creators have profiles within the system and fans can friend them as well. People can comment on each others’ profiles or photos and these are typically displayed publicly.

When MySpace was initially introduced, skeptics thought that it would be just another fad because previous sites like Friendster had risen and crashed. Unlike the 20-somethings who invaded Friendster, the teens have more reason to participate in profile creation and public commentary. Furthermore, MySpace’s messaging is better suited for youths’ asynchronous messaging needs. They can send messages directly from friends’ profiles and check whether or not their friends have logged in and received their email. Unlike adults, youth are not invested in email; their primary peer-to-peer communication occurs synchronously over IM. Their use of MySpace is complementing that practice.

The community angle of MySpace has highlighted in a comment by Robert Young on Om Maliks blog: If you are a member of MySpace, its not the web-page and blog you spent time constructing, its your social network of cyber-friends youve cultivated and accumulated over time.”

The Economist wrote in an article about News Corp and Rupert Murdoch in January:

Like Google before it, MySpace.com has entered the English language. Its appeal is that its members create an anarchic mix of their own content. The site is a collection of individuals’ homepages with photographs, music, links to friends and blogs.

As an internet business, MySpace.com considers itself to be an entirely new breed. Chris DeWolfe, its co-founder, says he wanted the company to take inspiration from sociology as well as from technology, and for that reason he based it in Los Angeles rather than Silicon Valley. The community has grown virally, with no advertising. Some of the photographs verge on the pornographic, and MySpace.com has about ten people in a room at its headquarters in Santa Monica, Los Angeles, weeding out explicit photographs. With its young members, its 24-hour discussion groups on everything from graffiti to independent film-making, and its thousands of undiscovered bands, MySpace.com has the ambition not just to be useful, like Google, MSN or Yahoo!, but cool.

Jeremy Wright wrote about the impact and influence of MySpace in February:

MySpace is Bigger Than Blogging: There are more nearly as many MySpace accounts as blogs (about 30M vs about 100M. More of them are started every day than blogs (about 250,000 vs about 100,000). There are more posts per day being made on MySpace than on all blogs combined (about 1.5M vs about 1.4M).

MySpace is Accelerating Faster Than Blogging: Considering it is much newer than blogging, this should be obvious. While it is currently smaller than blogs, at the current rate of growth and acceleration, it will be larger than blogging by this summer. That is ALL of blogging.

MySpaceers Network. Fast: It isnt that unusual to find MySpace accounts with thousands of connections. While many (outside of MySpace) might think that these connections are useless, the truth is that they represent the ability for networks to form quickly, and when graphed they do show that certain people are more likely to connect nodes and groups of nodes than others.

Fred Wilson wrote about MySpace and captured the broader trend: We are at the dawn of the age of personalized media. The web has given the world a place where the audience is the publisher and what we are witnessing (and hopefully participating in) is the personalization of media. It will manifest itself in many strange and wonderful ways.

Danah Boyd also compared Friendster and MySpace:

When Friendster launched, it was quickly inhabited by populations who had good reasons to connect with each other. By and large, the early adopters were living in a region different from their hometown (or living in their hometown post-college and cranky about it). Finding “lost” friends was a fun game – people wanted to connect. Of course, connecting is not enough and it was bound not to last, but it was fun.

Connecting is also the initial activity of newcomers on MySpace, but they move beyond that quickly. Of course, it never completely goes away, especially since MySpace acknowledges that not all “friends” are friends and no one bats an eye if someone collects hundreds of people. It’s more like a process of namaste – i acknowledge your soul and you acknowledge mine. MySpace did not try to force people’s connecting practices into pre-existing ideas of what should be. They let the practice evolve as users saw fit, without criticism, without restriction. As it evolved, people did new things with it. They used it to flirt, to advertise bands and activities, to offer cultural kudos.

The key message: Social technologies succeed when they fit into the social lives and practices of those who engage with the technology.

Tomorrow: The Acquisition