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Monday, January 21, 2008

Facebook vs. MySpace


Two years ago, Chris DeWolfe, the co-founder and chief executive of MySpace, was talking about international expansion with Rupert Murdoch, whose News Corporation bought the social networking site in 2005. According to Mr. DeWolfe, an entrepreneur used to moving at Internet velocity, he suggested that MySpace could expand to “four or five” countries in the next year.

“What about 13?” Mr. Murdoch said.

That was one of Mr. DeWolfe’s first lessons in just how fast business is done inside the News Corporation. MySpace ended up adding 15 local versions in the year. It is now up to 24 — “we just launched in Brazil,” Mr. DeWolfe said in one of his first interviews since signing a new two-year contract with the News Corporation in October.

In addition to expanding, MySpace is evolving. While it is introducing new musicians and playing host to amateur filmmakers, it is also signing artists to its own record label and developing online video series. It introduced a content guide, MySpace Celebrity, last week.

The world’s largest social networking site, MySpace has grown far past being merely “a place for friends,” as its slogan states. With an estimated 110 million monthly active users, MySpace is undeniably a powerful tool for advertisers who seek reach and efficiency.

Richard Greenfield, a media analyst for Pali Research, called MySpace a fantastic acquisition from a return-on-investment standpoint. The site was sold for $580 million; Mr. Greenfield said it was expected to have around $800 million in revenue in fiscal 2008, mostly through advertising.

“Rupert made an important bet,” said Eric E. Schmidt, the chief executive of Google, which signed a $900 million advertising deal with MySpace’s parent, Fox Interactive Media, in August 2006. “He may find that this is the single best investment he has ever made.”

But MySpace has challenges, especially from Facebook, which has leapt ahead of MySpace in technology and has been accumulating users at a faster rate. Facebook, with its cleaner interface and higher demographic profile, is also seen by some advertisers as a better bet. By comparison, the reputation of MySpace — with its cluttered and often sexually tinged personal pages and lingering privacy concerns — has suffered.

“It’s definitely not the sexy pick anymore,” said Adam Kasper, a senior vice president at Media Contacts, the interactive division of Havas.

So MySpace has changed tack. What was seen as a competitor to traditional media platforms is starting to resemble one.

“Some people still perceive MySpace like it was in early 2004, as a niche place for scenesters in New York and Los Angeles. That’s how it started, but it’s become very mainstream,” Mr. DeWolfe, 41, said. “It’s about consuming content and discovering pop culture.”

As a result, the MySpace site resembles a portal like Yahoo or AOL as much as a social networking site. Peter F. Chernin, the president and chief operating officer of the News Corporation, called MySpace a “contemporary media platform” and said the site existed to “create content and connect people to one another.”


Read the entire article@ NewYorkTimes.com

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