A thought-provoking piece by Rory Maher about the challenges currently faced by MySpace in executing its “Social network– Us?” strategy:
Bottom line: MySpace is in a very difficult position. Facebook has won the social network war, and MySpace’s new strategy is to go head-to-head with massive, seasoned Internet companies that have many competitive advantages. The odds that MySpace will turn itself around seem low.
The one aspect that Maher may miscalculate is just how un-smart these seasoned Internet companies actually are. He is almost certainly referring to Yahoo, whose own implosion over the past 12 months may provide MySpace with a perfect opportunity to steal share. (Lest we forget, Yahoo CEO Carol Bartz has been trying to pull a similar slight-of-hand over investors with claims that Yahoo has never really been a search company.)
A more puzzling question is: why is MySpace looking to former AOL and Yahoo executives to revive its fortunes? Neither company has much to recommend it today. Why not steal from the best and poach executives from amazing companies like Google, Apple, and, er, Facebook? (To be fair, MySpace was able to execute on this last one in nabbing Owen Van Natta, who formerly served as Facebook’s Chief Revenue Officer.)
Another troubling issue where MySpace’s hopes regarding ad revenue are concerned has to do with the anonymity of its user base. Unlike Facebook, which actively verifies user identities, MySpace differentiated itself early on from Friendster by allowing anyone to hold dozens of fictitious user profiles. Van Natta’s recent comments suggest that he views this as a distinct advantage:
“We think we’re different from Facebook because you don’t have to have a real connection to use it. Maybe you use it to discover music. Music tastes get influenced by your friends. Also movies. These are touchstones in relationships. You shouldn’t have to know them in the socialization of content.”
The upshot of allowing fictitious profiles? Absolutely insane early growth rates. But no one anticipated the hidden downside to this decision: how do you convince advertisers that you really are serving up relevant eyeballs for their products? Someone once commented that selling products and services on MySpace based upon users’ self-entered demographic data is like trying to market to people based upon who they dress up as for Halloween.
There’s a lot here worth reading. Let’s hope that someone at MySpace is taking notes.
via MySpace’s New Strategy Won’t Work, Either.
