Lessons to learn from MySpace revival
Less popular social networking sites looking to compete in the market can pick up tips from how MySpace turned around its fortunes, such as having a clear focus and riding on the strengths of its competitors through cooperation, according to media watchers.
According to Zach Clayton, CEO of digital marketing and analytics company Three Ships Media, the resurrection of MySpace was because of product innovation. "MySpace started innovating again and with a base of 25 million users, the word spread," he said in an e-mail.
The social networking site announced last week that it saw 1 million new user signups from mid-December to mid-January, which means up to 40,000 new sign-ups per day. The social network claims to have the largest catalog of free music online with 42 million songs available.
Paul Budde, managing director of BuddeComm, noted that the key to MySpace's recent success was due to its specialization in music and its cooperation, instead of competition against other big social sites. For MySpace, it already has a loyal following among music lovers and now it has the "right audience and the right product," he added.
MySpace's revival is also similar to Friendster's path, noted Budde. Last year, the social networking pioneer rebranded itself into a games platform and saw 2 million new users within two months' time, according to a report.
"There are similarities [between Friendster and Myspace]," he said. "Both moved into niche markets and used the broader social media to spread the message."
Leveraging strengths of others
MySpace's willingness to work with Facebook, instead of against the social networking leader which has 845 million members, also helped it gain users. The music site allows users the additional option of logging on using their Facebook accounts.
"Linking [MySpace] to the other sites makes total sense as many of these youngsters are also heavily involved in these media and the combination seems like a perfect fit, a very clever strategy!" said Budde.
He added that external Web sites were "perfect channels to attract more youngsters back to MySpace as the users will use MySpace for music and the other sites for communication.
Clayton added it was impossible for MySpace to ignore Facebook. "If you're going to do consumer social networking, there is no avoiding Facebook," he said. "Zynga's entire business model is built around Facebook. Before they went public, they had do decide, 'Do we work with Facebook or do we compete with it?' They made the only choice they could."
Previous reports noted that Zynga relied on Facebook for 81 percent of its accounts receivable during the third quarter of 2011. Facebook also revealed that the online game company contributes to 12 percent of its revenue. This week, rumors said Zynga was planning its own games platform to decrease its reliance on Facebook.
"MySpace's success moving into this space isn't surprising. But it's indicative of how people use social media," said the Three Ships Media CEO. "The real story here is about what people like to do on social networks: Look at pictures, chat with friends, play games, listen to music."
One Twitter user's reason why he signed up for MySpace supports Clayton's observations. @BVangenechten who recently signed up for a MySpace account said he was attracted to the site's music player. "I have zero friends on there but, hey, free music," he said.
Right talent and approach needed
According to Budde, MySpace's success also shows that "the Internet media is better left to new digital entrepreneurs rather than traditional corporate publishers". He was referring to MySpace's previous owner, News Corp, which had to sell the site at a loss last year.
The media conglomerate bought MySpace in 2005 for US$580 million but sold the site to advertising company Specific Media in June 2011 at a bargain price of US$35 million.
Budde added that new social media sites will need to specialize or target the mass market but not both ways as how News Corp tried to do but failed.