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In the realm of might-have-beens, MySpace had even more promise than Friendster. But unlike Friendster, MySpace remains salvageable. Though it shouldn’t try to challenge Facebook for social network leadership, it can still be a valuable consumer media business, if not a technology driver. Here’s how — and why.
When MySpace supplanted Friendster as the leading social network, it did so by delivering an entertainment and communication combination, along with an early embrace of social media plug-ins and mash-ups. It became the de facto home of music artists and had an early lead on Facebook in ad targeting. But while MySpace stagnated under News Corp. and a Google ad deal that guaranteed revenues without encouraging advertising innovation, Facebook built a real platform of NewNet technologies. MySpace must return to its roots, and its recent relaunch hints that it might just do that.
What’s Good About the Relaunch
MySpace’s relaunch is smart in its focus. It’s trying to rebrand itself as an entertainment hub with a lot of social elements, rather than as general-purpose social network; it aims to complement rather than compete with Facebook.
MySpace has accommodated Facebook and Twitter updates, but it’s questionable whether much of its audience will use such features to aggregate social communications. That said, MySpace has adapted feed-based user interfaces in what appears to be a unique fashion: Users can toggle between magazine- and TV-like modes as well as a conventional stream. This mix of active and passive entertainment discovery — users already get update streams from friended bands, studios, entertainment personalities, etc. — could prove a useful launch pad for MySpace fans to spread comments and recommendations outside of as well as within the network.
What’s Still Needed
MySpace still has a large — if declining — U.S. audience that is younger and more geographically diverse than the web average. Various traffic data companies show it reaching 40 to 60 million people monthly (though that’s almost half the size of Facebook or Yahoo). To keep that audience entertained, MySpace must innovate on the following:
- New ad vehicles. Two years ago, MySpace attracted attention with a campaign for luxury brand Cartier that integrated musicians like Lou Reed and Marion Cotillard. Today, MySpace gets rich homepage campaigns (with trailer, showtimes, behind-the-scenes info) for movie openings — Lionsgate’s “Saw 3D” for Halloween, of course — and big banners on its channel homepages from the likes of Samsung, Sprint and Fox Television. But it needs to create unique social sponsorship opportunities involving games, contests, interaction with stars and re-distribution outside the network.
- Social commerce. MySpace delivers full-track music streaming that enables affiliate purchases on Amazon. But it needs to build out a marketplace for artist merchandise, and should consider adopting gimmicks such as Groupon-like daily deals and group purchasing. Easy-to-build storefronts from Payvment make sense. It should also be a leader in cross-category virtual currency for games and downloads.
- Outbound syndication. MySpace wisely acquired viral music service iLike. But it needs more ways to spread content outside of its own site. It should copy, partner with or acquire GetGlue, a startup that offers Foursquare-like check-ins and badges for web entertainment content.
Who Should Care
With its young audience of entertainment consumers, the potential rebirth of MySpace is important to the following types of companies:
- Entertainment marketers. This includes artists and managers, movie studios and theater chains, and TV networks. This is a base MySpace can hold onto.
- Youth marketers. With proper sponsorship innovation and entertainment tie-ins, marketers like Coke, Pepsi, Aeropostale, Nike, etc. could open their advertising pocketbooks.
- Ad networks. It’s not clear whether News Corp. will include MySpace ad inventory with the Fox online ad network it’s selling to optimizer The Rubicon Project.
- Competitors. Facebook should have no worries; in fact, MySpace should adopt much of Facebook’s platform, and tie in tighter to its social graph. MySpace will compete with Yahoo, MSN and AOL for youth audiences.