Pretty Boy MySpace CEO Has Dumb Surrender Plan
MySpace now says it is no longer competing with Facebook, the rival social network with far more users. No, now MySpace will focus on the niche of music and digital entertainment. And compete with Apple and Google.
MySpace CEO and would-be saviour Owen Van Natta, the studmuffin hired away from Facebook, told the Financial Times he’s not gunning for his ex employer any more:
“Facebook is not our competition,” he said. “We’re very focused on a different space.”
Van Natta added that MySpace will focus on its strength: Music. MySpace has become the default Web host for independent rock bands, and recently purchased music software company iLike.
MySpace wasn’t always so blasé about social networking, the company used to have Facebook in its sights. It was barely two years ago that Van Natta’s predecessor Chris DeWolfe got an urgent phone call from Peter Chernin at MySpace’s parent company saying, “I need a plan for dealing with Facebook in two weeks.” This led, according to Julia Angwin’s book Stealing MySpace, to a strategy for dealing with “the Facebook challenge head on”, presented at a Merrill Lynch conference.
“I realise every person in tis room wants to ask me about Facebook, and, frankly, I want to talk about Facebook,” [Fox Interactive Media president Peter] Levinsohn said.
But these days MySpace has just one-third of Facebook’s users. No wonder the company is singing a different tune.
It’s just not a well advised one. Instead of competing with a money-losing internet company headed by a twentysomething university dropout, MySpace will now be taking on Apple (cash hoard: $US30 billion) and Google (annual profits: $US5 billion, operator of YouTube and soon to be a retailer of MP3s). Sounds like a great plan.
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Myspace was acquired in 2005 for $580 million. RBC Capital’s Jordan Rohan predicted it would be “worth $15 billion within three years” (source: Keen, A. 2007. The Cult of the Amateur). That was based on the assumption that it would follow a social-networking bent.
Ryan Tate and the rest of the world know this original strategy didn’t work out for myspace. I agree with Tate, it is unlikely that their new strategy will be any better.