It’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 (s NWS), which led to it being outmaneuvered by a younger, hungrier, smarter rival in Facebook.
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 (s goog) 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