It was not long ago that MySpace was seemingly on top of the Internet world. Not only was the popular site at the top of its social networking niche, but it was also a pioneer in creating the niche in the first place. The site was an absolute hit with teenagers, college students, and even some in the older demographic. That was until Facebook came along, causing competition to heat up, and eventually surpassing MySpace to capture the social networking throne.
MySpace's future once looked as bright as the sun, but Facebook has eclipsed it, making many wonder what will actually happen to the site in the months or years to come. That is, of course, if it even makes it that far. Will MySpace resurrect itself? Will it be purchased and rehashed into something new? Will it simply die? Those are some questions that are currently unanswered, but one can use recent happenings with the site to form some rather negative prognostications about its future.
News Corp., MySpace's current owner, purchased the site back in 2005 for $580 million. What seemed a promising business move back then has now turned into much uncertainty. MySpace has not only undergone restructuring in its site layout, but also with its workforce. The social network was recently forced to make the decision to cut 500 of its workers, equal to 47 percent of its entire work force.
While the layoffs do give News Corp. some financial breathing room for the time being, the media giant is taking things one step further by also soliciting offers from others to purchase MySpace. If the purchase offers are not enticing enough, MySpace could become part of a merger. A spinoff project using the dying social network is another possibility as well.
Brad Shimmin, an analyst with Current Analysis, stated that the spinoff seems most likely, as a new owner could use the MySpace infrastructure as a springboard for something innovative and fresh. Rather than attempting to regain its lost crown from Facebook, Shimmin believes that the MySpace spinoff would be a product that does not compete directly with Facebook. Such a strategy seems like a sound one, considering that Facebook's brand resonates throughout the mainstream media and has over half a billion users.
Facebook's meteoric climb to its current state was highlighted when the social network surpassed MySpace in terms of unique traffic in 2009. In November of 2010, MySpace announced a “mashup” with Facebook, where it imported Facebook data onto its pages. Such a move signified MySpace's acknowledgment of Facebook's overwhelming presence. Now, with the solicitation for offers, it seems as if MySpace's end is near.
Rob Enderle, an analyst with the Enderle group, stated that MySpace could be seen as damaged goods, making it hard for News Corp. to fetch a decent price in a sale. One possible buyer could be Google, which has hinted at a desire to enter the social networking scene. Even more humbling for MySpace would be if it was purchased by Facebook. Why would Facebook be interested? It could use the purchase to essentially buy the remaining MySpace users to boost its own numbers. It also could make the move to simply shut down the site and prevent any other buyers from building it back up into a competitor.
For more on this topic, visit the Computerworld article.
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