Friday, March 27, 2009

Is MySpace Dead?

As the popularity of online social-networks has exploded, so too has the number of competitors in the marketplace. Despite a growing awareness of the dangers inherent in having our personal information constantly shared with the public at-large, too many of us find ourselves in a situation where we have different accounts on multiple social-networking websites - even some that we never really use anymore.

Thus, in the name of cyber house-cleaning, I finally took the plunge and decided to delete some of my social-networking profiles. I had no problem deciding to give Friendster and its other seemingly pre-historic brethren the proverbial axe. However, I ultimately decided to delete my MySpace account as well.

MySpace, along with Facebook, is among the social media elite. Owned by Rupert Murdoch, MySpace currently earns $800 million in annual revenue (whereas Facebook, in comparison, brings in less than half of that amount, coming in at $300 million). Also, despite recently being surpassed by Facebook in terms of numbers of users, MySpace still reaches 58.5 million people each month (compared to 68.5 million for Facebook).

On the surface, these numbers would indicate that MySpace is actually thriving - both in terms of revenue as well as reach. So why is there a growing perception that MySpace's time has past? Is it fair to label it as "dead"?



The answer may, indeed, be yes. Not only does Facebook have all of the upward momentum versus MySpace, but next-generation Web 2.0 sites like Twitter are seeing exponential growth at their expense. In other words, despite a thriving market, MySpace's numbers are actually in decline. That's never a promising trend in business.

I envision MySpace executives frantically scurrying around their offices trying to figure out why this is the case. There was a large switch away from MySpace towards Facebook about two years ago, and at the time that was mostly attributed to poor website design and an abundance of spam. But MySpace has long since rectified those problems, and yet the shift continues unabated. Some experts believe that Facebook simply has reached a tipping point where it continues to grow based solely on inertia, but, based on the data, wouldn't MySpace have a similar amount of inertia themselves? That argument leaves too much unanswered. Others look at demographic trends and notice the gentrification of MySpace and Facebook (how users of different income and education levels are segregating themselves between the two services). But that seems a peripheral issue when considering the large mainstream shift that's been occurring.

Perhaps the answer can best be found by bringing the question back to an individual level. When deciding whether to keep or delete my MySpace account, I factored in 1) that I hadn't even logged on to the account in four months and 2) that most of my "friends" hadn't posted any new photos or other content during that entire time.

The strength of all of the social-networking websites lies in how much user-generated content people are sharing with each other. If nobody posts anything, there seems to be little point to using the service.

Thus, the moral of the story is that individuals hang out where their friends hang out. While early adopters might have preferred Facebook's less annoying design, the main reason for MySpace's decline today is that people are simply following their friends' migrations. Ironically, Web 2.0 sites' viral capacity to generate super-fast growth is the same force that accelerates their own demise.

At least for me, MySpace has already been dead and buried for quite some time. All I did by deleting my account was make it official.
  

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