The rise and fall of MySpace definitely resembles a classic case of “the bigger they are, the harder they fall”. While “social networking” might seem like the most lucrative option in a time where Facebook rakes in money by the second, it is not always the most practical way out; at least, not from an economical perspective. The website, bought by Rupert Murdoch and News Corporation for a whopping $580 m, was sold yesterday for a mere $35 million.
In 2006, Google signed a $900 million deal which enabled them to sell ads on MySpace. This deal put the value of MySpace at $12 billion; a far cry from its current selling price of $35 million. There are several lessons to be learnt from this debacle of mammoth proportions. The first: Social Media business is not indestructible. The fear of a bubble is something that all major players in the field must consider. The second: Complacency might not be a good thing after all. Being at the top is a tough job and can be maintained consistently only with the power of constant innovation. MySpace made the mistake of becoming too commercial too fast. At the end of the day, social media is about the users first and business later.
Pop star Justin Timberlake, along with Specific Media, turned out to be one of the primary investors in the erstwhile social networking giant. Justifying his investment in the fallen star, Timberlake said. “”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.” (Guardian UK)
With Google launching its own social networking platform, Google+, MySpace has a long road uphill if it is looking to make a comeback in the social networking space.