MySpace was the #1 social network — then News Corp's $900M ad deal broke it

MySpace launched on August 1, 2003, and by 2005 it was the most-visited website in the United States — surpassing Yahoo Mail and Google Search. It pioneered social networking at a global scale: 115 million monthly visitors by April 2008, 300 million registered users, and an $800 million annual revenue run rate. News Corporation bought it in July 2005 for $580 million, and at its peak valued MySpace at $12 billion. Then Facebook overtook it, and the decline became one of the fastest collapses in internet history.

MySpace's failure was a compound of strategic and tactical errors. The $900 million Google ad deal in 2006 required MySpace to plaster ads everywhere, making the site slow and preventing product experiments. News Corp prioritized quarterly revenue over the user experience. Spam, phishing, malware, and pornographic content overran the platform without adequate moderation. Meanwhile, Facebook offered a clean, consistent design, real identity, and a platform that let developers build applications — creating network effects MySpace could not match.

MySpace peaked in April 2008. By May 2009, Facebook had surpassed it in unique US visitors. News Corp laid off 37.5% of the workforce in June 2009. In June 2011, MySpace was sold to Specific Media and Justin Timberlake for $35 million — a 94% loss from the $580 million News Corp paid. The worst indignity came in March 2019, when MySpace lost all user content uploaded before 2016 in a botched server migration — erasing the music, photos, and memories of 12 years of users in a single IT mistake. The former king of social networking was now a data-loss footnote.