How Did MySpace Drop So Quickly?

I don’t know about you, but it seems like Myspace has been around forever. I decided to do a little research and see when exactly the social network launched and it was only around 6 years ago, yet it seems like the once hyped place on the web is already on life support…

Then again 6 years in the online/technology world can be the same as 20 years.

We already know about how quickly new social networks like Facebook and Bebo have quickly caught up and, in most cases, already surpassed the value of MySpace. In fact, even LinkedIn has a value of nearly twice that of MySpace. Throw in the fact that many are hating the spamming touches of MySpace, and it seems like these other social networks are slowly cutting Tom and his MySpace out of the money.

You might remember that Rupert Murdoch and News Corp. (NWSA) picked up MySpace for $550 million back in 2005. Since than the company has been struggling to keep its lead ahead of its major competitor in Facebook.

Most recently, Myspace laid off 30% of their staff. While that still brings the total to about 1000 employees (the same as Facebook), it marks MySpace of somewhat conceding their problems. For too long, they have stayed with the “if it’s not broke, don’t fix it” theme that the once highly adored company now seems rather outdated and antiquated. As the number of MySpace users declines, so does advertising revenue. EMarketer projects that U.S. revenue will fall 15% to $495 million in 2009 from $585 million last year.

If history has taught us anything is that lay offs are usually the first step in trying to bring a company back to life. The problem is that lay offs alone won’t fix anything. While we don’t want to cut all hopes for MySpace, lay offs can also lead to more lay offs, more changes, and eventually just a failed business.

In the world of social media and social networking, there are new sites and services being developed almost every minute it seems. Some fail and some prosper, but one thing we know is that the lack of ability to stay ahead of the curve and innovate will ultimately kill not just Myspace, but any business who follows the same strategy.

Further reading (LA Times) – MySpace Fell Off The Pace