Facebook vs MySpace – The writing’s on the wall

Looks like MySpace CEO Owen Van Natta ran out of options. I think if I was him I may have run out too.

Inside News Corp (who own MySpace) he has less room to move than independent Mark Zuckenberg of Facebook (who have sold only 1.6% of their business to Microsoft).

Earlier this week Jon Miller (the Newscorp Chief Digital Officer) fired Van Natta in favour of his two more recent appointees COO Mike Jones and Chief Product Officer Jason Hirschhorn.

But that’s all boardroom maneuvers of an obviously troubled company which is showing stagnant growth compared to its main competitor Facebook. (The stats tell the story http://bit.ly/b5IU2l)

Besides the stats, there are a number of key strategic reasons why Facebook will make MySpace more and more irrelevant:

  1. MySpace within a corporate will never be as hungry as independent Facebook
  2. Facebook makes it easier for others to write applications for users
  3. The user demographic of FB has more legs (older and more professional)
  4. The FB user interface is more understandable (although less creative)
  5. Big gets bigger much much easier than small gets bigger

Crucially the advertising deal that MySpace has with Google is up for renewal in Aug 2010 and based on performance is likely to dramatically change and reduce revenues.

Will this cause another loop in the death spiral of MySpace? And what of Google’s Buzz launched last week?

Jeremy Owyang did a useful analysis of the situation.

Author: Dale Williams

Dale is based in Cape Town on the southern tip of Africa from where he maintains connections with people all over the world through his portfolio life.