A Myspace Resurgence?

In our last class, Professor Kagan mentioned how Facebook is becoming the world industry leader in social networking while MySpace is plateauing. So the question remains: what is MySpace going to do about it?

Apparently, quite a lot. According to a recent CNN article, MySpace has undergone some significant internal reshuffling, including the hiring of a new chief executive, Owen Van Natta, who has done extensive work in online music and entertainment, and used to be an executive at ... you guessed it, Facebook. To me, this appears to signal either that MySpace will start taking on characteristics that seem more in line with Facebook's, or that it will return to its music roots, which is what propelled the social networking site in the first place (or, perhaps a combination of both).

The article also quotes Adam Ostrow from Mashable.com, who attributes the decline of MySpace to its current owner, News Corp. The implication is that a corporation is poorly equipped to run a social networking site. I tend to believe him, given that Friendster began to stagnate when its founder Jonathan Abrams allowed too many corporate chefs to spoil the broth, in a manner of speaking.

Interestingly enough, Facebook is growing into quite a large corporation itself, with well over 700 employees (I've actually noticed a number of my friends in Nor Cal are listing Facebook as their employer on ... you guessed again, Facebook). It's true that Mark Zuckerberg adamantly denied Digital Sky Technologies' CEO Yuri Milner a seat on the board. But it may only be a matter of time before Zuckerberg caves in and allows Facebook to take on more board members with long corporate resumes, and this perhaps may cause Facebook to lose its innovative luster, as with the social networking companies that preceded it.

But the point of the article again, is that there is hope after stagnation. Just as Friendster is making its comeback through discovering new markets in Southeast Asia, MySpace is banking its own comeback on innovation and reinvention. One last hurdle both companies may still have to face, however, is their "demographics problem". According to the CNN article, because MySpace's audience is younger than Facebook's, it is less appealing to advertisers. By the same token, Friendster's international audience proves more difficult for advertisers to make money than with a domestic audience.

For me, there were three important take-aways from all this: (1) In the social networking world, innovation is the key to staying on top; (2) Corporate board members and investors may in fact stifle innovation instead of fueling it; and, (3) Even when companies plateau or plummet, there's always room for a resurgence.