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Summary:

The recent exodus of executives and technical talent at MySpace has only bolstered my belief that the social networking site is nothing more than a carcass of its former self. In fact, it’s been rotting away for the past few years, as these charts illustrate.

facebookrulessocialnetworks.gifA few weeks ago, when News Corp’s digital chief, Jon Miller, fired MySpace CEO Owen Van Natta and replaced him with Co-presidents Mike Jones and Jason Hirschhorn, I decided it was time to write the social networking site’s epitaph. The recent exodus of executives and technical talent has only bolstered my belief that MySpace is nothing more than a carcass of its former self. In fact, it’s been rotting away for the past few years, as these charts illustrate.

The first graphic shows the comparison between Facebook and MySpace. The Johnny–come-lately controls 74 percent of the social networking market, according to data collected by Zscalar. And the gap between Facebook and its rivals is only widening.

Data from the Nielsen Company illustrates how over the past three years, Facebook has crushed the competition. Not only are people spending more and more time on Facebook — about 6.5 hours a month, on average, as of December 2009 — its number of users now tops 400 million. And that usage is coming at the expense of its rivals. During December, 67 percent of social media users visited the site.

social-network-growth.png

The important thing to note in this graphic: the steady decline in the number of U.S. visitors to MySpace over the past three years. comScore’s data only bolsters that argument, though it shows a slight bump in December 2009 traffic. But that seems like a dead-cat bounce. myspacetanks.gif

At this point I think it’s safe to say that there is a higher chance of me winning an Academy Award than the MySpace co-presidents (and their boss, Jon Miller) being able to execute a successful turnaround of the social network.

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  1. This is very true. And there’s no reason to believe they are trying to turn this around. If they were smart they would try to make it a predictably slow-growing music lifestyle site. Nothing flashy, just predictable.

  2. Om, look at the charts. If “slow death” means ~10% decline while still blowing the blogger darlings Twitter and LinkedIn out of the water (in both users and revenue), then I’ll take a slow death any day.

    I think bloggers (and blog commenters) have a fundamental disconnect in understanding that they might not be the target market.

    1. Spot on. I use Twitter and LinkedIn every day, but, as you say, I understand I don’t have the same viewing/participation habits as the average/mean Web consumer… for which all concerned should daily give thanks to $DEITY.

      On the other hand, Om is far likelier to win that Academy Award than I am to buy anything hawked on Facebook (or MySpace).

    2. My real world anecdotal evidence for 25-35 year old demo is that myspace is so unpopular you are made fun of if you mention it–Similar to having an @aol email address. No one has a problem with Twitter, FB, and LinkedIn.

      I can’t name a single friend that still uses myspace, but almost EVERYONE I know uses FB. A few use Twitter, and a few use LinkedIn. I’m on LI, even though I consider it to be mostly useless and only log in about once every 3 months.

  3. no reason to believe that facebook will not suffer the same fate over the next few years. It will follow the same curve.

    1. Karl

      The only difference is that Facebook is more of a technology company and are developing fundamental underlying technologies and that gives them an edge. As I have written in the past, Facebook Connect is a much stronger argument in favor for FB. We should make that difference.

      1. “fundamental underlying technologies”…C’mon. Get off the horse!

  4. Why the focus on Myspace? The same thing will happen to Facebook. Just like it did for Friendster, Firefly and Sixdegrees.

    1. Todd, see my answer in response to Karl Long. I agree on points you are making except Facebook is moving into the “identity” market with FB Connect and that gives them a massive edge over others.

  5. I cringe at pie charts like that — it implies social networking is a zero-sum game.

    1. I am not quite sure, as to what exactly you mean, but if you mean that things end really fast for social networks, then yes. I have in the past compared social networks to night clubs and they have often followed the arcs of a night club. My 2c.

      1. I think what Victor meant was that by making a pie chart you are implying there is only certain amount of eyeballs(users) to go around. Therefore its a zero sum game. What you have discounted is that new users are entering the landscape. Eg. Dads and Moms never used Myspace but they are entering Facebook. So in this case, Facebook is gaining entirely new users and not necessarily from Myspace.

  6. MySpace was not as innovative as Facebook thus the demise. I personally think the site functionalites of Facebook was more interactive when compared to MySpace which enhanced user experience and this is one of the factors which perhaps hindered their ability to really scale out faster, my opinion anyways.

  7. @Todd – I disagree, all the services you mention never had the widespread adoption like Facebook has. People of all generations use Facebook. As long as they don’t do something to alienate users in large numbers, Facebook is here to stay.

  8. Did the introduction of TV mean the end of radio? How about the internet? MySpace needs to pivot into a niche network, and just deal with the fact that they ain’t never getting back to where they were. That doesn’t mean they will die, just that they’ll fade away…

  9. It’s true that MySpace is in serious trouble, especially considering how strong the network effects in the social space are. And fleeing talent is a huge problem.

    But there’s still a ton of potential in that business. MySpace is still the 14th or so biggest site on the Internet, based on Compete.com. And they have a positioning that could work well against Facebook. MySpace has always been messier, more creative, and more music-oriented than Facebook. FB certainly has the numbers, but it’s fundamentally a pretty dull site. The platform’s great, and the strategy has been well-executed, but no one goes to Facebook to see anything new or risque. If anything, they’re a fast follower in many areas (see Twitter). Not to mention that people’s parents are now getting on Facebook, which is the death knell for cool. At least MySpace managed to avoid that with its crazy aura.

    MySpace should get out from under the News Corp umbrella, which must make recruiting and retaining top talent immensely difficult. They also need to reinforce their positioning as the slightly seedy but alluring counterpoint to Facebook. They need better marketing (not advertising) to make people excited about being on the site. And they could probably use some help with monetization, which seems pretty difficult in the social network world in general.

    Are they going to turn around? I doubt it, especially if News Corp holds on to them. But there’s a lot there to work with if only they would.

  10. @Om,

    I’m not sure I agree with your conclusions, but I think your arguments are sound with the exception of the “dead cat bounce” which seems to be holiday related seasonality that all of the social nets reflect.

    My reasons for disagreeing with your conclusions:

    1. Social networks are (mostly) new forms of entertainment, with a vertical social net like LinkedIn offering niche value. As forms of entertainment, they capture user attention which is correctly measured in eyeballs and units of time, but create little economic value. This means that social networks are inherently diminishing services with a shorter lifecycle versus services which offer greater economic value.

    2. Social networks should be benchmarked against broadcast media as broadcast media is also measured in eyeballs and units of time. Radio and broadcast television have shown similiar (albeit slower) mass adoption, with critics arguing the demise of radio when broadcast television emerged, and then the demise of broadcast television when cable television emerged. Today, we also have satellite radio, and IP based television. Lots of fragmentation, declining eyeballs and units of time. No broadcast fatalities as of yet, but LOTS of mature broadcasters whose lifecycles aren’t over yet.

    Bottom line, I don’t think MySpace is dead, just maturing. As several have already commented, MySpace can thrive (financially) at current usage levels if and only if they get their niche content down. Think MTV, or VH1 if music is MySpace’s greatest strength.

    My $.02,

    Best.

  11. Great post, Om – I agree, Facebook is gradually monopolizing the social networking space; it’s inevitable at this point given the numbers and momentum.

    I think it’s interesting that as the internet is evolving into infrastructure the permanence of web apps is being dictated by strong network effects cutting across different generations. It’s this “generational pull”, born out of college campuses worldwide, that really made Facebook and also why it will last for the long haul.

    Very exciting times ahead as we see mobile, online payments, and voip intersect with social networking.

  12. Bavaruab Cavemenche Wednesday, February 24, 2010

    @Curtis I completely disagree. Myspace was targeted towards youth like myself who grew up to find it childish and they failed to capture Generation (Y). Most people associate Myspace with loose sex and thus shun it unless they want risky behavior. The main advertisers on Myspace are dating sites who is finding dates when they are 13? Bad marketing? failure to adapt proved their demise.

    1. @Bavaruab,

      I don’t disagree with your assertions, except MySpace hasn’t met their demise. Plus MySpace is much bigger than LinkedIn, Classmates.com, and Twitter. So my point on MySpace’s maturity stands.

      1. LinkedIn is not a daily stop for anyone I know that isn’t in Marketing or HR. It’s just not useful or fun. Classmates.com is a well-known scam site, so it shouldn’t even be mentioned in this conversation.

        Twitter is most useful for people with smartphones (it was born for mobile use after all), and they aren’t mainstream yet, so I wouldn’t expect it to compare to a regular web-based social network.

  13. Well, Om, I’ve never seen you act, but you’re probably right.

    Do you think that MySpace management just got complacent? What, if anything, can MySpace do to resurrect its magic?

  14. With regards to some earlier comments re: FB, I’ve noticed fewer friends using it over the past year or so. I’m not certain of the reason, and am aware that it’s anecdotal evidence but I’d be curious to see the numbers.

    On a slightly different tangent, I know some people who’ve setup multiple accounts so they can play Farmville and other games more effectively.

  15. I love being able to listen to the music on Myspace, but I have completely given up trying to connect with my friends there. The mechanism is just too unwieldy.

    Another problem with Myspace is the user interface is trashed by allowing each person to apply a template to their site, and upload tons of images, videos, etc..to the point where it is unmanageable. The Facebook interface, for the most part, is clean and loads quickly.

  16. difficult for myspace to catchup unless they do something revolutionary. there is also the ‘internet fatigue’ issue here. if I am spending X number of hours on site A, then I am too fatigued to try out site B, UNLESS there is something substantial in site B.

    maybe MySpace should offer share of revenues generated from advertising on MY page. I work hard to maintain my page/profile, upload pictures, post interesting tidbits, comments etc, and FB/MySpace makes all the money? its like a producer taking all the money and not paying the film crew. that could change the social media networks compete. share revenues with users.

  17. social networks have been around since day 1 of the Web. They are nothing new. why is there so much media brainwashing over this? so theres a new way to social network thanks to Ryze. big deal? most people dont even know Ryze started this latest wave many years ago. geocities was a social network, tripod was a social network, blackplanet was a social network. so was aol hometown, so was xanga, then came ryze, then friendster. then myspace. nothing has changed. everyone migrates from network to network. no aol? go to friendster. friendster is too slow? go to myspace. this is all just BS. facebook will be dead in a few years like the rest and something new will replace it because people move around to the next cool thing. this is how it’s been since day 1 but it is evolving.

  18. Facebook and Myspace exists because there is no more AOL in 2010. Idiots need a place to go.

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