Will MySpace try to monetize its ecosystem?

Will MySpace try to monetize its ecosystem?

Summary: Over the last year or so, many companies and products have sprung up which attempt to feed off of MySpace's success - widgets, embeddable media players etc. Some of which have been blocked by MySpace, while others such as YouTube have been met with direct competition from the social network itself. Over at GigaOm, Robert Young has outlined a number of reasons why MySpace may start to charge third-parties for access to its ecosystem.

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Over the last year or so, many companies and products have sprung up which attempt to feed off of MySpace's success - widgets, embeddable media players etc. Some of which have been blocked by MySpace, while others such as YouTube have been met with direct competition from the social network itself (MySpace video). Over at GigaOm, Robert Young has outlined a number of reasons why MySpace may start to charge third-parties for access to its ecosystem:

I’ve been thinking through an oft-discussed scenario involving MySpace… one that I have good reason to believe is now highly likely in 2007. What if MySpace suddenly decided to put up tollbooths and all the players within the MySpace third-party ecosystem had to start paying the mothership access fees?Without doubt, a strategic shift in policy by MySpace along such lines could cause significant ripples, if not outright panic, among many of those vested in the MySpace economy.

Among the reasons given by Young (such as the departure from Fox Interactive of web 2.0 sympathizer Ross Levinsohn), YouTube is cited as the main catalyst for such a move:

As I’m told, one of the key drivers for MySpace to start charging their ecosystem has to do with YouTube. Specifically, FIM wants to monetize all those YouTube videos that are embedded within MySpace pages. Now that YouTube is owned by Google, internal forecasts are estimating that MySpace can add as much as an additional $500 million in revenues to the existing agreement they have with Google (which is guaranteed at $900 million of revenues over 15 quarters). That’s a lot of cash, and who can blame them for wanting to secure that income stream? But if MySpace starts charging YouTube, do they have to set up tollbooths for everyone else? They’re pounding their heads against the wall on this one.These are vexing issues and I empathize with the management of FIM and MySpace.

It's an interesting potential twist to the MySpace vs YouTube debacle. Although I think a licensed MySpace ecosystem could be the social network's downfall. If many of the third-parties were to refuse to play ball, then much of MySpace's appeal would be lost. Users love to pimp out their profiles (however painful that is to the eyes and ears), and if they don't have access to all of those third party widgets and other bling, they may just jump ship.

Topic: Social Enterprise

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