Team Outliers: Josel Cates, Danielle Ross, Vince Tam, Lulu Xu Case Study: MySpace Team Outliers: Josel Cates, Danielle Ross, Vince Tam, Lulu Xu

BACKGROUND MySpace launched in Jan. 2004 and by July 2006 had 90 million users Decline thereafter, possibly because of Facebook's introduction With the launch of Facebook platform, amount of users increased by 15% in just one month

PROS Users design pages Initially, users could connect with whomever Bands, celebrities, "entity" pages Acquisition by News Corp for $580 M, targeted advertisers more directly Older users Easy-to-use interface which allowed developers to build programs for integration in Facebook More private than MySpace Private company, only Microsoft bought minority stake for $240 M CONS Customized profiles can be unaesthetic and slow to load Controversies over teenager safety and online bullying Pressure to include excessive ads on user profiles due to the Google deal Acquisition by News Corp created culture clash Existing major competitor - MySpace Users have less control over the design of their personal profiles Introduction of Beacon drew controversy

RECOMMENDATION MySpace should decide to launch their own developer program Why? Pros vs. cons for 2 options Join Google's OpenSocial Launch MySpace's Own Developer Platform Internet stats and financial data

OPTION 1: JOIN GOOGLE'S OPENSOCIAL PROS Ability to match Facebook Platform quickly No expense or major investment CONS Huge uncertainty At this point in time, Google was not a leader in any online services categories Lack of application exclusivity MySpace competitors can utilize same applications Inability to extract payments from developers due to lack of differentiation between social networks

OPTION 2: LAUNCH MYSPACE’S OWN PLATFORM PROS Ability to compete directly with Facebook More control over timing and design of the platform Easier to extract payments from the application providers Will work better to increase site traffic Attract more advertisers Satisfy minimum traffic level required by the deal with Google CONS More costly than joining OpenSocial

Exhibit 2: Unique monthly visitors increasing at a faster rate for Facebook than MySpace

Exhibit 4: By Nov. 2007, Facebook users viewing more pages per visit than Myspace, which drives impressions for advertisers and increases revenue for Facebook, so Myspace should mirror Facebook's model

Exhibit 5: Average length of stay per visit declined from 28 to 24 minutes for Myspace, so need to keep applications unique in order to keep users on MySpace to drive ad revenue

Exhibit 6: Internet content spending has increased most rapidly for entertainment categories, so it is most important to develop the entertainment aspects of MySpace, like apps