I've casually and simplistically likened MySpace in the past to a restaurant or bar that is hot today and may not be tomorrow. That's not entirely right or fair because there’s a lot more complexity involved and MySpace has become a pop-cultural phenomenon. But the analogy captures something that goes to the instability of the social networking world and its fickle user base — especially where usage is not built on something functional and needs-based but instead on something more capricious or intangible, like "buzz" or "cool." Friendster is the poster child for the rise and fall of this kind of site.
As an illustration of the potential vulnerability, SiliconBeat posts about Bebo’s growth and move on MySpace in the UK and its growth among some US users. I had done a short post on this previously here.
Some of the family or mom-based social networks, for example, are potentially more stable than MySpace because they are appealing to a distinct audience segment (albeit large) and organized around established needs. Similarly some of the social-directory products are organized around established needs. At a high level one could say the same thing about MySpace in the abstract: it’s a site dominated by teens and twentysomethings who are interested in music and/or dating.
I’m not arguing that MySpace should become InsiderPages. But in some sense MySpace still needs to figure out what it wants to be when it grows up.
There’s the “network effect” and what might be called an “anti-network effect.” The former is the power of critical mass; the more people you have the more people will show up. This is what happened with eBay and Google and it feeds on itself up to a point of saturation or late maturation. By contrast, what I’m calling the anti-network effect is what happens when the site ceases to function for users or grows “cold” or “boring.” The abandonment of the site by users will pick up speed as they learn their friends and others are leaving. So the thing that built the network in the first place helps accelerate its undoing if it starts to lose favor.
Nobody wants to be the first to arrive at a party or the last to leave.
MySpace is quite dominant (for now) in its, well, space. But it is vulnerable for a number of reasons in the medium and longer term. I wrote about that previously here.
I saw a whole bunch of ads on my JetBlue flight yesterday for MySpace tie-ins to TV shows and films. Those reflect the opportunity that Fox sees in MySpace as a channel. But it underscores the danger that accompanies the move to bring greater revenues to MySpace. In a way, MySpace would be much better off with sponsored links on search results pages than tons of display advertising from major brands and content producers. Display and brand advertising isn’t “relevant” in the same way as sponsored search. Targeting strategies (behavioral, contextual) seek to overcome that of course.
Whether it’s publicly expressed or not, Fox clearly has a mandate to justify its $580+ million investment and monetize page views on MySpace. Expectations at the corporate level and on Wall Street are high. But the company must carefully manage the brand and be hyper sensitive to MySpace users and their perceptions of the service. If another site, such as Bebo or one that has yet to emerge, steals the mantle of cool from MySpace that could be the beginning of a snowball phenomenon – my “anti-network effect.”
Google was blindsided in a way by the rise of MySpace. But MySpace might equally be blinded by its seemingly unassialble market position and not see its own successor waiting in the wings.
MySpace almost needs to institute the equivalent of an early warning system to alert management to the slightest whiff of the loss of cool at the grass-roots level.
It must walk the tightrope between being a cool, cutting edge destination and one that is stable and predictable enough to satisfy traditional marketers. That’s a very difficult balance.
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Related: Gore Uses MySpace To Keep Earth A Safe Place (MediaPost, reg. req'd) and MySpace seeks link with Google or Microsoft and MySpace growth may be undoing.
