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Myspace isn’t going away December 2, 2008

Posted by jeremyliew in Consumer internet, myspace.

Businessweek covers the comments of writer Michael Wolff about Myspace, which he thinks is going to go away:

Michael Wolff: MySpace. They [meaning News Corp] know they have a huge problem. They’re quaking in their boots about MySpace. It always was a little rustling when I was there, there was this rustling—

Jon Fine: What do you identify as the problem?

MW: Facebook.

JF: OK. But Facebook is still smaller in America, and—

MW: Absolutely. But you know the rhythms of the Internet business, which I think are still, at this point, immutable. Something else comes along—a better technology, a better flavor of the month—and you, the former, are downgraded. Possibly to the point of being downgraded out of existence.

As a parallel, he points out that AOL* was once the dominant web destination, and now it is not. He misses one key point – AOL was not free. At it’s height it charged $23.95/mth for internet access bundled with community.

When people could get community for free and access for cheaper, they unbundled. Since MySpace is free, it is not going to get beaten on price.

Furthermore, now that AOL is also free, AOL and its subsidiaries reach 111m US unique users/mth. The AOL subscriber base peaked at 26.7m, with on average about 2 users per subscriber. So it actually has MORE users today than it used to.

Pundits like Wolff are often too early to call a top. People have been predicting that cable would “kill” broadcast TV for several decades now. While cable now reaches more people than broadcast TV, there are plenty of people still watching Heroes, Desperate Housewives and American Idol.

MySpace is going to be around for a while.
* Prior to joining Lightspeed I worked at AOL, initially as SVP of Corporate Development, then as GM of Netscape


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