What’s new at MySpace
August 29, 2008 by grzegorz.piechota
”Hey, did we mention that we’re profitable? And that we have 115 million monthly visitors worldwide? That we’re outpacing Gmail and Hotmail in messages sent? And giving YouTube a run for its money in video downloads?”
”Fast Company” magazine publishes an interview with MySpace cofounders Chris DeWolfe and Tom Anderson.
The social networking company has been acquired by Ruper Murdoch’s News Corp. for $580 million in 2005 and has been then facing a fierce competition from another site Facebook - the latter has 124 million users worldwide according to comScore vs. 115 million of MySpace.
DeWolfe and Anderson claim that ”MySpace is no longer a social network at all, but a ’social portal’: a global, content-rich hub with a social component.”
Why is it important to be seen as a portal? ”Some 90% of online-advertising spending goes to big portals,” DeWolfe says. ”A much smaller chunk of money goes to more experimental buys or social media.”
Some other quotes:
On sophisticated marketing deals that MySpace brokers:
”When McDonald’s wanted to revive its classic “two all-beef patties” jingle, for instance,MySpace quickly wrangled up-and-coming talents in a range of genres to create their own versions, then opened up a contest for user-generated versions, including videos.
For State Farm, which was looking to connect with younger customers, MySpace hooked the insurer up with a summer concert series called Projekt Revolution starring Linkin Park and other bands. The campaign runs many levels deep: from a branded presence at the concerts; to a sponsorship of the Projekt Revolution concert site, complete with live-concert footage (and no State Farm logos in sight); to a lightweight gaming site; to a strictly business State Farm site that can connect a Linkin Parker with an insurance agent.”
On competitive advantages over Google:
”While Google may dominate the search market, it isn’t close to MySpace in terms of detailed information about what users do and consume — the holy grail of targeted marketing. MySpace’s social-advertising initiative, called HyperTargeting, launched about nine months ago, and is its version of the ‘we know who you are and what ads you’ll like’ voodoo. ‘Click-throughs on these ads are up 300%,’ DeWolfe says.”
”At about 60,000 uploads a day, it is becoming a popular alternative to YouTube. (MySpace had some 55 million unique video viewers in May 2008, according to comScore Video Metrix, versus 82 million for YouTube.) Aside from user-generated videos, MySpaceTV has a huge universe of professional-grade content, from Fox shows such as The Simpsons; to mini-episodes of ’80s sitcoms; to National Geographic programs; to an election site called MySpace Impact, which offers broadcast coverage from MSNBC and NBC.”
On the music business as their ripest opportunity and how they can compete with Apple’s iTunes:
” ‘When we first started MySpace, we were a site that a lot of bands, tastemakers, and influencers immediately gravitated to,’ DeWolfe recalls. For musicians trying to make a deal with a major label, or just fill up a venue, it became a perfect way to self-promote and digitally mingle with fans.”
”MySpace Music… the venture — which was slated to launch in September but at press time had yet to name a CEO — will offer the major labels their best hope for a significant competitor to Apple’s iTunes store. DeWolfe is quick to say that isn’t the point.
‘We didn’t set out to annoy Steve Jobs or compete with him,’ he insists. ‘This was not conceived as an iTunes killer.’ Anderson points out that iTunes itself isn’t much of a moneymaker, anyway: Apple is really a hardware company, not a media company, he says, even if iTunes does control about three-quarters of the digital download market. And Jobs has burned a lot of bridges with the labels, especially over his reluctance to embrace variable pricing — charging more for newer or more popular music. MySpace may not want to kill iTunes — it says its music site will actually boost iPod sales — but the labels wouldn’t cry if it happened.”
On the relations with a proprietor:
”Two [MySpace] founders insist, life is good in the house of News Corp. ‘I don’t think you can name one company that was acquired where the founders were still there after three years,’ says DeWolfe. Anderson agrees: ‘We’ve never felt cornered or pushed into something we didn’t want to do.’But clearly having Murdoch, along with News Corp. COO Peter Chernin, at your elbow can be a complicated experience. ‘When we told Rupert we had launched in the U.K. and were planning on three more international markets,’ DeWolfe recalls, ‘Rupert said, Why not make it 13?’ DeWolfe asked for more staff and had a toehold in 13 countries about 60 days later. (MySpace now operates in 29 countries.)”
”Jeff Berman… MySpace’s president of sales and marketing… tells me, ‘Last time Rupert was here, he sat right down, put his feet up on the coffee table, and just asked me what I was doing.’ Berman answered. ‘Then he asked me why I was doing that instead of all the other things I could be doing.’”
”Murdoch wandered over to a junior developer, pulled up a chair, and got an impromptu lesson in coding. ‘He was so inspired that Rupert took such an interest,’ says the kid’s boss, senior vice president of technology Jim Benedetto, ‘that he basically didn’t leave the office for four days.’ ”
Tagged: advertising, business model, internet, social networking
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