MySpace Flounders, Facebook Marches On
MySpace employees have begun to feel the hurt of the floundering social network. The company has now announced that over 700 of it’s 1,800 total employees have been or will be laid off – 30% of U.S. staff last week, and 66% of non-U.S. staff today. Meanwhile, the rival Facebook employees are enjoying being able to cash out with the latest valuation of Facebook at $10 billion dollars and a nice investment from Digital Sky Technologies, a Russian fund that’s paying $200 million for a 1.96% stake in the company.
A look at the traffic analysis from Google trends doesn’t look too favorable for MySpace either (see screenshot below), Facebook is on a continuous upward trend while MySpace is continuously struggling to keep up.
It also doesn’t help that Google will be pulling the plug on their (overpaid) MySpace ad deal once the contract is up. That means MySpace’s main source of revenue will be gone. MySpace needs to refocus and reposition itself in the social networking community if it wants to stay alive. They need to find new ways to innovate, monetize, grow, and expand (which may be tough considering how much shrinking they are doing right now). MySpace is becoming desperate here. The ads on MySpace now are worse then ever before, they literally have them plastered everywhere making the site (even more) hideous and hard to use. Perhaps MySpace should consider going back to where they started and really focusing on music. Music has always been a strong point for MySpace, they have been able to make a distinguished name for themselves in the music industry (among artists/bands).
If I were Owen Van Natta I would take my one current strength and use it as the building block for the future. It may be too late for MySpace to compete with Facebook as a place for “friends”, but it is definitely not too late for MySpace to compete with Facebook as a place for music.
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