MySpace
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
MySpace was the world's dominant social network, founded in 2003 and peaking as the #1 US website in 2006. Rupert Murdoch's News Corp bought it (via Intermix Media) for $580 million in 2005 — but Facebook passed it worldwide in April 2008 and in the US in May 2009, and the network effect ran in reverse: unique visitors halved from their December 2008 peak and ad revenue fell from $470 million (2009) to $184 million (2011). Put up for sale in early 2011 with a $100 million asking price, MySpace was sold to Specific Media (with Justin Timberlake) on June 29, 2011 for $35 million — a 94% discount — with about half of its 400–500 staff laid off.
02 / MySpace FAILURE REASONS
Failure reasons
MySpace lost to Facebook on product and priorities. Under News Corp it optimized for music, entertainment and ad-driven page views rather than a clean user experience; pages grew cluttered with spam and customization, while Facebook shipped the News Feed (2006), an open app platform (2007) and early mobile apps — and built a cleaner real-identity network. As friends migrated to Facebook, MySpace pages went quiet and the network effect reversed: between mid-2009 and mid-2011 it lost more than 1 million visitors a month. Management tried a 2010 music-focused rebrand, but traffic kept plummeting; News Corp's media executives managed it like a portal, not a social product, and churned through CEOs. When News Corp put it up for sale in 2011, bidders for even $100 million were scarce — a fraction of the $580 million paid in 2005.
03 / EVENT HISTORY
Events in the structured record
- Company founded
MySpace launches and quickly becomes the world's dominant social network, peaking as the #1 US site in 2006.
- Acquired by News Corp
Rupert Murdoch's News Corp acquires MySpace (via Intermix Media) for $580 million.
- Overtaken
Facebook passes MySpace worldwide in April 2008 (comScore: ~115M visitors each); it holds the US lead until May 2009.
- Sold
News Corp puts MySpace up for sale early 2011 (asking $100M) and sells it to Specific Media for $35 million on June 29, 2011, laying off about half the staff.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In its fiscal fourth-quarter earnings call, News Corp reported a $254 million loss on the June 29, 2011 sale of MySpace to Specific Media, which pushed net income down 22%. (Note: the often-quoted $545M headline figure = $580M purchase price minus $35M sale price is a rough comparison, not a reported loss.)