Rumors Of The Decline Of MySpace Are Exaggerated

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More Money For Wesabe

The negotiations between News Corp and Yahoo that would see MySpace owned by Yahoo in exchange for 25% of Yahoo itself have bought out some interesting assessments of MySpace. Most commentary has been negative, Michael Arrington describes MySpace as a fading star and others have suggested that MySpace is struggling, that it has lost the battle based on the fact that Facebook gains far more attention amongst early adopters.

Let me say from the offset that I’ve never personally understood the appeal of MySpace. I could devote pages to how terrible its feature set it, how compared to Facebook it has been poorly managed and how Facebook is the better platform. I get Facebook, and the numerous friend requests I get daily would suggest that many others do as well. However I’ve long since accepted that numbers don’t lie.

MySpace is not in decline, MySpace is growing. At current growth rates Facebook may take several years to come close to matching MySpace in terms of traffic and user numbers baring a massive drop in user numbers by MySpace during that time.

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Even confronted by a strong competitor in Facebook, MySpace continues to grow. Whilst there is evidence of a slight dip or levelling out of growth in March according to Alexa, June has delivered the strongest month ever for MySpace in terms of traffic.

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According to comScore MySpace grew from 55.8million unique visitors in August 2006 to 66.8million in April 2007, just shy of a growth rate of 20%. Facebook had a higher percentage growth rate, but off a much lower base, moving from 14.8million to 23million over the same period. The difference is traffic is approximately 3 to 1.

Why aren’t MySpace users flocking to Facebook by their millions?

Demographics are this first reason, and I’ve already answered it above. I don’t get MySpace, but I get Facebook. I’m 31, I’m not 16. Facebook is structured, and that appeals to Generation X and the top of Gen Y. MySpace on the other hand is like the wild west, where anything and seemingly everything goes. MySpace user pages may appear ugly, but they are an expression of rebellious youth, a group that may not like the conformity of Facebook; personalization appeals to younger users more than it does do older users. MySpace pages can be edited in raw html, the best Facebook can do is widget support in a standard blue and white.

Invested time is an important factor, and this comes back to the first mover status of MySpace. Over 170 million people have invested time building their MySpace pages, from adding friends, blogging, links and designing god awful templates. Whilst some will come across to Facebook, many won’t unless Facebook hits a tipping point it hasn’t yet reached, when all their friends are using it. Similarly users will also tend to stay where their friends are. Facebook is popular amongst early adopters because many of us have never fully embraced MySpace, there’s no huge investment in building a MySpace page to give up for most, and collectively we can also connect with friends and associates in the same position.

On numbers alone the News Corp/ Yahoo tie-up would not be as bad as some would make it out to be. Yahoo desperately wants a major social networking property. It failed to acquire Facebook, and rumors of an attempt to buy Bebo never went any further. MySpace as a Yahoo company would deliver a wildly popular service into the Yahoo stable, providing a wealth of leveraging opportunities for Yahoo’s diverse site offerings. Taking the place of Google as the search engine on MySpace, a deal previously worth $1billion over 3 years, would also immediately provide an increase in Yahoo search traffic and related revenue. Of course, nothing may come of the negotiations, but in assessing the deal numbers provide superior guidance on MySpace as a social networking player.

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