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Summary:

Most Internet analysts suggest Myspace fell from grace because it crumbled in the face of stiff competition from Facebook. But a Reuters report suggests it may have been Google that dealt the fatal blow by accident as long ago as 2006.

Knife by Mavadam on Flickr

Knife by Mavadam on FlickrIt’s been obvious for a long time that Myspace is on the ropes, suffering under a series of pummeling blows including an ever-changing executive lineup and slashing staff, to being put up for sale by owner Rupert Murdoch.

And the general consensus is that it has been knocked out by a combination of two interlinked factors: Its progress was slowed by dealings with its corporate parent News Corporation, which led to it being outmaneuvered by a younger, hungrier, smarter rival in Facebook.

That’s the main thrust of this substantial and interesting profile of the company by Reuters reporter Yinka Adegoke. It’s a long read, coming in at a little more than 4,000 words, but is probably the best summary I’ve read of the ups and downs of a website once deemed hot property but now looked at with derision.

But the article also points out that it’s not as simple as News Corp clumsily handing Facebook the keys to the social networking kingdom. In fact, the piece suggests, perhaps it was actually Google rather than Facebook that unintentionally dealt the killer blow to Myspace.

Think back to 2006: That’s when they signed the $900 million, three-year advertising deal to turn Google into Myspace’s exclusive providers of text ads and search. It was a great cash prize for Murdoch’s purchase, but actually ended up being a weight around its neck. The deal’s targets required Myspace to crank up page views and increase already-heavy advertising space at precisely the same moment that Facebook was pushing forward with a clean and easily-understood design.

As Adegoke reports:

Around this time, the Google agreement, which had been hailed as a major coup by Chernin and Levinsohn as well as Wall Street, started to be viewed by Myspace executives as a double-edged sword. The Google deal required a certain number of Myspace user visits on a regular basis for Google to pay Myspace its guaranteed $300 million a year for three years. That reduced flexibility as Myspace couldn’t experiment with its own site without forfeiting revenue.

“It was a good deal in the short-term but in the long term it ended up not being so good,” said a third former Myspace executive close to advertising sales. “We were incentivized to keep page views very high and ended up having too many ads plus too many pages, making the site less easy to use than a site like Facebook.”

This moment is often overlooked, but it turned out to be absolutely crucial. And, of course, it’s kind of darkly amusing that Google — in trying to find a partner who could help it in the confusing world of social web — managed to give a huge boost to one of its nascent rivals.

It suffocated Myspace with love — perhaps something for Larry Page to think about as he reorganizes Google to try to retain its commanding position online.

Photograph used under CC license courtesy of Flickr user Mavadam

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  1. Christoph Weber Friday, April 8, 2011

    MySpace was a clumsy, overbearing attempt at social networking, populated largely by teens with atrocious pages. Even professionally designed band pages feel too heavy and too busy. I had written off MySpace long before 2006, and I suspect many other people not in their teens who could have been MySpace’s sustainable user base did so too, regardless of the Google deal.

  2. Open Letter To News Corp:

    Dear Rupert, Chase, and Jonathan,

    Bet you never thought your mistakes, as well as your practice of lying to people, would ever become public did you?

    We will assume it is hard to dispute the facts when there are correspondences and audio recordings of all communications that support any representations as it relates to the conduct and activities by, and/or on behalf of News Corp, MySpace, and its representatives.

    If Chase, Jonathan, or Rupert would personally, and on behalf of News Corp and MySpace, provide authorization and permission to release all correspondences and recorded telephone conversations related to this matter. We would be willing to accommodate that request by providing to several media outlets, including Fox News, all related materials so that a “fair and balanced” determination could be made as to how News Corp does business.

    This shall also allow outside individuals, parties, media and the public to determine how badly Carey and Miller, through their activities and conduct, destroyed MySpace and drove it from a success to a complete failure.

    As a result of their unwillingness to further discuss and initiate a process that would have generated the stated revenues and results as referenced due to their egos and the greed obstructing their ability to apply common sense to this matter, and to utilize their brains. They have effectively destroyed MySpace and drove its value down more than any other reasons for the decline and eventual failures of MySpace.

    We shall see if Carey, Miller, or Murdoch are willing to let the public in on the truth, and provide authorization so that the referenced material may be released, as well as all related documentation in support of these same representations as have been made and as they relate to this matter.

    Here are the facts; Carey and Miller were provided the opportunity to change the direction of MySpace last year with a proposal that would increase the net profits of MySpace to 1.5 billion dollars by the third year.

    Based on our experience with News Corp, Carey, and Miller no one should trust any of them.

    They requested that we disclose the plan to them without any written agreement in place. When that was refused there were no further discussions. And for the record New Corp has a documented history of being given ideas and concepts, and then incorporated those same ideas or concepts. They later claim that they already had been developing those ideas or concepts, and effectively cut out the party or parties providing them with any such ideas or concepts.

    This knowledge not only comes from similar occurrences experienced by other individuals. But this was also learned from previous experiences in prior dealings with News Corp and/or their affiliates. You should not trust News Corp and demand that a written agreement be in place, accompanied with detailed documentation of all transactions, and well maintained records of any business dealings you may have with News Corp, their representatives, and/or affiliates.

    I would venture to guess that any entity they claim to be offering more than 10 million dollars for MySpace would be another misrepresentation when considering the current state and condition of MySpace.

    It is believed that the damage that Carey and Miller have inflected to MySpace has brought its value down to nothing.

    Anyone that would be willing to pay the 50 to 250 million dollars to purchase MySpace, as News Corp alleges, would probably mean one of two things. Either they lied to MySpace about what they were willing to pay.

    Or a more likely scenario would be that News Corp, Murdock, Carey, and Miller are making gross misrepresentations in an effort to drive the sale price of MySpace up.

    TIME WILL TELL!!!

  3. To Rupert, Chase, and Jonathan,

    Bet you never thought your mistakes, as well as your practice of lying to people, would ever become public did you?

    We will assume it is hard to dispute the facts when there are correspondences and audio recordings of all communications that support any representations as it relates to the conduct and activities by, and/or on behalf of News Corp, MySpace, and its representatives.

    If Chase, Jonathan, or Rupert would personally, and on behalf of News Corp and MySpace, provide authorization and permission to release all correspondences and recorded telephone conversations related to this matter. We would be willing to accommodate that request by providing to several media outlets, including Fox News, all related materials so that a “fair and balanced” determination could be made as to how News Corp does business.

    This shall also allow outside individuals, parties, media and the public to determine how badly Carey and Miller, through their activities and conduct, destroyed MySpace and drove it from a success to a complete failure.

    As a result of their unwillingness to further discuss and initiate a process that would have generated the stated revenues and results as referenced due to their egos and the greed obstructing their ability to apply common sense to this matter, and to utilize their brains. They have effectively destroyed MySpace and drove its value down more than any other reasons for the decline and eventual failures of MySpace.

    We shall see if Carey, Miller, or Murdoch are willing to let the public in on the truth, and provide authorization so that the referenced material may be released, as well as all related documentation in support of these same representations as have been made and as they relate to this matter.

    Here are the facts; Carey and Miller were provided the opportunity to change the direction of MySpace last year with a proposal that would increase the net profits of MySpace to 1.5 billion dollars by the third year.

    Based on our experience with News Corp, Carey, and Miller no one should trust any of them.

    They requested that we disclose the plan to them without any written agreement in place. When that was refused there were no further discussions. And for the record New Corp has a documented history of being given ideas and concepts, and then incorporated those same ideas or concepts. They later claim that they already had been developing those ideas or concepts, and effectively cut out the party or parties providing them with any such ideas or concepts.

    This knowledge not only comes from similar occurrences experienced by other individuals. But this was also learned from previous experiences in prior dealings with News Corp and/or their affiliates. You should not trust News Corp and demand that a written agreement be in place, accompanied with detailed documentation of all transactions, and well maintained records of any business dealings you may have with News Corp, their representatives, and/or affiliates.

    I would venture to guess that any entity they claim to be offering more than 10 million dollars for MySpace would be another misrepresentation when considering the current state and condition of MySpace.

    It is believed that the damage that Carey and Miller have inflected to MySpace has brought its value down to nothing.

    Anyone that would be willing to pay the 50 to 250 million dollars to purchase MySpace, as News Corp alleges, would probably mean one of two things. Either they lied to MySpace about what they were willing to pay.

    Or a more likely scenario would be that News Corp, Murdock, Carey, and Miller are making gross misrepresentations in an effort to drive the sale price of MySpace up.

    TIME WILL TELL!!!

  4. It would be more correct to say that News Corp’s decision to cash in on it’s MySpace purchase with an overly aggressive deal with Google Ads is what killed MySpace. Murdoch bought MySpace simply to get access to all the personal data on MySpace, and then choose to maximum his return by burning it to the ground with spam. Nice job.

  5. I think the problem with myspace was the fact that it was constantly under attack. Half the time you couldn’t even access it. They obviously had problems with hackers or malware and were unable to keep up with it.

  6. Classic Tone Monday, April 11, 2011

    Myspace did not die because of competition- it died because the moment it changed the format that it’s users loved- which made users go else where- in the beginning it was a free market- independent musicians had a reason and methods to be heard by masses, so they did everything they could to be seen and heard. once they took away that forum and made it to difficult for indie artists to be found and be heard- they’re sight sunk- they protected the major labels by blasting you with their content and protecting their names- but in turn lost their mass following- unique clicks get ad revenue- they pushed away those click by not allowing free ideas!

  7. Alazarin Mobius Friday, April 29, 2011

    What killed MySpace? Bad coding. MySpace, although a great idea, became a glue-pit guaranteed to bring even the most powerful computer to its’ knees. Is it any wonder people got fed up?

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