Business

MySpace sold: end of an era?

Read time 3min 40sec

MySpace, the original social network, has been sold to online advertising firm Specific Media, for $35 million.

In its prime, it was a popular and innovative site that allowed users to connect and share, based on their music interests. Rupert Murdoch's News Corp acquired the site six years ago for close to $600 million from its original owners.

The site was inspired by the concept of Friendster, and was founded in 2003 by employees of eUniverse, an Internet marketing company. Chris DeWolfe, Brad Greenspan, Tom Anderson and Josh Berman all worked on the project. Anderson was the first president of the company and DeWolfe was the first CEO.

In 2007, MySpace was at its peak and was valued at $12 billion, and News Corp reportedly attempted to merge it with Yahoo.

However, as Facebook began to expand from just being a social networking site for college students to becoming an open platform, MySpace started to lose ground.

In recent years, in the wake of the continued growth of Facebook and Twitter, MySpace has struggled to maintain its user base.

Last year saw a number of re-launches of the site, as it tried to reinvent itself as a “social entertainment destination” through its MySpace Music streaming service, and its focus on entertainment content.

Failure to innovate

Figures, however, show MySpace has gone from 75.9 million unique visitors in 2008, to 34.8 million in May this year - compared to Facebook's 157.2 million unique visitors for the same time period.

MySpace announced at the beginning of this year that it would halve its staff in an effort to reduce costs and turn over a profit - after already drastically reducing staff in 2010.

The announcement of the sale of the site also comes in the same week as Google's international launch of its social platform Google+, which could see the search giant become a major player in social networking.

Analysts say MySpace's downfall can be attributed to its inability to innovate at the same level and speed as its rivals.

Bringing MySpace back

According to a press release issued by MySpace, News Corp will take a minority equity stake in Specific Media.

Specific Media CEO Tim Vanderhook says: “MySpace is a recognised leader that has pioneered the social media space. The company has transformed the ways in which audiences discover, consume and engage with content online.

“There are many synergies between our companies as we are both focused on enhancing digital media experiences by fuelling connections with relevance and interest. We look forward to combining our platforms to drive the next generation of digital innovation.”

Pop star Justin Timberlake is said to also be taking an ownership stake in MySpace, and will play an active role in the site's management.

Timberlake said in a statement: “There's a need for a place where fans can go to interact with their favourite entertainers, listen to music, watch videos, share and discover cool stuff, and just connect. MySpace has the potential to be that place.”

The partners are expected to reveal their plans for the future of the site in the coming months, but it is widely expected that the site will continue to focus on music and entertainment.

Sceptical

As Twitter feeds begin to fill up with the news of the sale of MySpace, it appears social media is not being kind to its pioneer.

“Some idiot just bought MySpace for 35 million. Now looks like the ideal time to sell my dusty old CD towers for $9 million,” tweeted one user.

“MySpace has been sold for $35 million. Six years ago News Corp bought it for $580 million. That is one spectacular investment FAIL by Mr Murdoch.”

“I'm planning on buying MySpace in a couple of years. Fairly hopeful I can get it for 30 quid and a kitten.”

In reference to Timberlake's role in the sale and his role in “The Social Network”, another Twitter user said: “Did the buyers of MySpace think Justin Timberlake is actually Sean Parker?”

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