With reports of social network Myspace about to sell for ~$30 million, the tech world eagerly awaits the HBS study for why the service, which was bought in 2006 by Newscorp for $580 million and was at some point valued at $1.5 billion (a quote in a Business Week article referred to it as “one of the best acquisitions ever”) ultimately failed.
For those that can’t wait for the inevitable GSB white papers, former Facebook President and Napster co-founder Sean Parker explained why Myspace succumbed to Facebook in an interview with Jimmy Fallon at the NExTWORK Conference in New York.
While the entire interview is a delight to watch, the highlight is when Fallon starts asking Parker about whether Facebook is “it,” (“Is Facebook the end game?”) bringing up the failed Myspace for comparison. Parker answers,
“It’s never the end game. Facebook is now a platform upon which all kinds of applications are being built it’s definitely not it. It would be incredibly presumptuous and self-serving of me to believe that Facebook was the end of history. The only way it could possibly be the end of history is if it becomes some sort of artificial super intelligence that takes over the world.”
Able to put being the possibility that it was victim of some artificial super intelligence aside, at minute 20:54 Fallon asks Parker, “Where did Myspace go wrong?”
“The failure to execute product development,” Parker replies. “They weren’t successful in treating and evolving the product enough, it was basically this junk heap of bad design that persisted for many many years. There was a period of time where if they had just copied Facebook rapidly, they would have been Facebook. They were giant, the network effects, the scale effects were enormous.”
Parker goes on to credit the ingenious move of targeting college kids for Facebook’s eventually market dominance, “Facebook entered the market through college and the reason we went in through college was that college kids were generally not Myspace users. College kids were generally not Friendster users …”
Taking an almost Machiavellian tone, Parker also alludes to the latter social network’s displacement being deliberate, “It was this completely open market and it was a real longshot. Nobody actually believed, outside of us three or four people in Palo Alto, that you could enter the market through this niche market and then gradually through this carefully calculated war against all the social networks become the one social network to rule them all.”
“Carefully calculated war against all social networks” is a very interesting word choice by Parker especially when coupled with the extremely self-aware statement that “if they had just copied Facebook rapidly, they would have been Facebook,” a line which seems like it came straight out of The Social Network.
Well now is as good as a time as any to mark the end of that war; Myspace is selling for comparative peanuts while Facebook is valued at $70 billion. To the victor go the spoils, at least for the moment.
MySpace is one of the world’s largest social networks, with about 125 million users. Originally inspired by Friendster, MySpace quickly grew to become the world’s largest social network, before being overtaken by Facebook. User pages are highly customizable and support integration with widgets such as Slide or YouTube. MySpace provides users with a way to connect around content and culture. MySpace was started as a side project of the internet marketing company eUniverse (now called Intermix Media) in August...
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...
Sean Parker is a serial entrepreneur and a managing partner at the Founders Fund. As one of the three founders of Napster, Sean helped architect and manage the peer-to-peer file sharing application to become one of the largest on the net. Parker subsequently helped found and manage Plaxo, a VC-backed contact management application company. More recently, Parker worked as the Founding President of Facebook before moving on to join up with Peter Thiel at The Founders Fund,...