MySpace is one of the world’s largest social networks, with about 125 million users. Originally inspired by Friendster, MySpace quickly grew to become the world’s largest social network, before being overtaken by Facebook. User pages are highly customizable and support integration with widgets such as Slide or YouTube. MySpace provides users with a way to connect around content and culture.
MySpace was started as a side project of the internet marketing company eUniverse (now called Intermix Media) in August 2003. Brad Greenspan, then founder and CEO of eUniverse oversaw the project, which was also led by Chris DeWolfe (later CEO), Josh Berman, and Tom Anderson (soon to be President). It officially launched in January 2004.
By February 2004, MySpace reached 1 million registered users. By November 2004, that number had reached 5 million. In July, 2005 News Corporation bought eUniverse (renaming it Intermix Media) for $580 M, of which approximately $327 M was the valuation of MySpace. At this time, the site had 20 million registered users. In mid 2007, News Corporation contemplated selling 25% of MySpace stock to Yahoo! in a deal that would have valued the site at $12 B, though this never went through.
After being acquired, MySpace’s revenues grew rapidly, as News Corporation pursued lucrative advertising deals. In August 2006, Google made a $900 M agreement to provide search and advertising directly on the MySpace site, which is set to expire in June 2010.
In mid 2008, MySpace participated in a major site redesign. Throughout its history, critics have often cited the chaotic and disorganized interface as a severe drawback to usability of the site. This redesign made the main page more streamlined and clean.
In late 2006, Universal Music Group sued MySpace for millions in damages from copyright infringement. This suit was settled in mid 2008 by the launch of MySpace Music, a site where users can listen to streaming songs from all sorts of artists. To supplement this venture, MySpace acquired iLike in mid 2009. MySpace had previously also launched a record label in 2005 and musicians such as Lily Allen and Sean Kingston were first discovered through MySpace.
In mid 2007, MySpace acquired PhotoBucket for $250 M in cash, plus an additional $50 M earn-out. By late 2009, News Corporation sold a 2/3 stake in Photobucket to a group of investors valuing the company at $60 M, over 80% less than the acquisition price.
Since 2008, user growth has stagnated and page views and other metrics have fallen. In April 2009, longtime CEO and co-founder Chris DeWolfe was replaced by Owen Van Natta, in a publicized firing. President and head of product, Tom Anderson, was kept on, but in a different position. Two months following this, MySpace announced it was laying off 30% of its workforce amounting to 420 people.
In June 2011, Myspace was acquired by Specific Media for a reported US$35 million. Justin Timberlake also took ownership in this acquisition and will play a strong role in Myspace’s future strategy and creative direction.