The lesson of the MySpace debacle

You are what you are.

This has always been an important lesson for business success.

Whether it's Coca-Cola buying a movie studio (resulting in Ishtar) or Time Warner acquiring AOL (which triggered the dot-bomb) it's also a lesson corporate executives routinely forget, from the top of their New York skyscrapers.

You do one thing well, why not do other things?

If those things are similar to what you're already doing, or if you are buying a going concern that knows what it's doing, and you can afford the cost of keeping its people happy, business combinations can still work.

But in the age of the Internet, where people come or go at the click of a mouse, that's harder. Much harder.

Rupert Murdoch has been learning this the hard way. His debacle at MySpace continued this week as a second CEO, Owen Van Natta, jumped (or was pushed), less than a year after coming on board.

Since buying MySpace in 2005 Murdoch has had nothing but turmoil, forgetting this one simple rule.

The rule actually has two parts.

Don't buy what you don't understand. And don't pretend to be something you are not.

Murdoch did not, and does not, understand that the Internet is a friction-free business environment where reputation is a central asset, and humility a vital tool in managing that asset. Microsoft's arrogance helped jump-start open source, leading to the age of Google, just as IBM's arrogance gave Microsoft its chance.

The second part of the rule, trying to be something you're not, is illustrated best by Yahoo. Yahoo was the world's first great search engine. Then the company under (ironically) Tim Koogle bought into the Wall Street idea it could be all things to all people -- a portal -- and the success of Google (or something like it) became inevitable.

Both these rules came into play with MySpace. On buying the company Murdoch confidently predicted that synergies among his sites would drive traffic. That is stupid. Audiences don't build synergies on the Internet, technology does.

Then there's the idea of a conservative news baron defining the tastes of young people or (worse) controlling them. Young people turn over. Their identities change every year, as kids grow up and others become adults. Trying to stay on top of youth culture is riding a tornado -- no one does it for long. (See this year's Super Bowl halftime for a prime example, and don't get fooled again.)

The acquisition, in other words, was doomed from the start. Each time Murdoch has talked about owning or controlling the Internet or Internet users, he has just dug the hole deeper. It's like Disney trying to run Reader's Digest.

It is technology, not content, that deliveries online synergies. Combining the two, or pretending that the second drives the first, has always been a dumb move.

Don't you make this mistake. If ever you find success, stay with what works.

This post was originally published on Smartplanet.com