THE MYSPACE DECLINE
MySpace is a social networking website that was launched in 2003 from its headquarters in California by creators Chris DeWolfe and Tom Anderson. In July 2005, it was purchased by the News Corporation for $580 million by the founder and chairman, Rupert Murdoch. From then on, MySpace took its place as the dominant social site by creating a shared experience, using music, film and pop culture to connect over 100 million users. The purchase was seen as a good investment and in less than a year, MySpace had tripled its value in relation to its purchase price, bringing in an astonishing 70,000 new users daily. The social site even went on to beat Google Search and Yahoo! Mail in becoming the most-visited website in the United States. As it continued to prosper, MySpace signed a three-year advertising contract with Google worth $900 million which more than compensated for News Corp’s purchase. Google bought the right to become a MySpace feature, allowing it to display its advertisements to the network’s users. At its peak, MySpace was being valued at 12 billion dollars. However, this didn't last very long. In 2008, Facebook - their rival social site, was gaining momentum and attracted more than 300 million regular users - three times the amount of MySpace users. From this point on, it all went downhill for MySpace. They missed their target revenue for the fiscal year and ended up letting go off 40% of the staff and closed several of their international offices. MySpace had basically given up and their market share decreased drastically from 66% to 30% as they lost users daily. My evaluation is based on the article ‘The Rise and Fall of MySpace’ written by Matthew Garrahan and published in the Financial Times magazine. The article offers a lot of criticism on how Rupert Murdoch over exaggerated the social site's success by claiming that it would bring in 1 billion dollars in revenue - almost twice as much as the previous year. This statement was...
References: 1. Garrahan, M. 2009. The Rise and Fall of MySpace. [online] 4th December 2009. Available at: http://www.ft.com/intl/cms/s/0/fd9ffd9c-dee5-11de-adff00144feab 49a.html?siteedition=intl#axzz2yjwxAul3 [Accessed: 10 Apr 2014].
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