Massucci's Take: MySpace problems may spread to Facebook, Twitter
Filed under: Company News, Technology, Columns, Media
MySpace founders have been pushed aside and there is speculation layoffs are coming.As Facebook and Twitter watch what's happening at MySpace, they should be worried and heed the warning of potential problems to come. Social-networking sites grow like weeds and, well, die like weeds too.
Twitter is the fastest growing networking site right now. Facebook is number two. MySpace, on the other hand, is seeing its audience decline and may have to fire employees.
When the growth of a social-networking site slows, you don't need as many workers anymore. If a large corporation buys a smaller company, there's the danger that the creative input of its founders will no longer be needed. That's what's happening at MySpace and it's bound to happen at Facebook and Twitter down the road.
My Space is preparing to lay off 25 percent or more of its staff, after laying off five percent last year, TechCrunch reported this week. "Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure," a Fox Interactive Media spokesman told DailyFinance in an e-mail.
That doesn't sound good. Certainly from the outside, it looks like Facebook and Twitter should take any buyout offer now and worry about growth and revenue later. Of course, that's what MySpace did and look at what the company is facing.
No matter how fast the growth, social networking sites can go from hot to cold almost overnight. Friendster is a good example. MySpace has lost one-third of its audience, except for video use, from April of last year to April of this year, according to Nielsen Online, which measures Web audiences.
"One of the challenges with running one of these large social networking sites is you are always trying to figure out what it is that people want and then balancing that against how do you make money off it," John Riedl, a professor of computer science at the University of Minnesota,told the Minnesota Daily.
At this point the founders and executives at Facebook and Twitter could take a buyout offered by Google (GOOG) or Microsoft (MSFT) and hope they are given the freedom after being acquired to continue to grow their services.
As exciting as it must be for these executives to be working at these companies as they grow quickly, there's cause for concern. Grow too fast and the costs can't be contained. Grow slowly and you are in danger of becoming irrelevant. Take a buyout and you likely lose control. Decline buyout attempts and take the risk that there won't be enough money or revenue to help sustain future demands.
"We have to put the product and the service that we're building first," Twitter co-founder Jack Dorsey said in an interview with DailyFinance last week.
That's the right approach for Dorsey and his team now. What, though, is the right approach later?
Anthony Massucci is a senior writer for DailyFinance. You may follow him on Twitter at hianthony.
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Reader Comments (Page 1 of 1)
6-13-2009 @ 2:08PM
Ms awesomeone said...
My Space has become quite disgusting with the pictures and crap that they allow. It allows teens to send pictures and look like whores and prostetutes. It used fo be for just plain ole socializing but from experience it houses hundreds of digusting pictures and information. So far haven't seen that on Facebook. i used to allow my kids to go on My Space but it is forbidden in my house for the kids snd the adults.
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6-14-2009 @ 10:09AM
JOhnny Mack said...
Wow, amazing. I thought MySPace was on the top. It certainly kicks Facebook to the curb.
RT
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6-14-2009 @ 11:24AM
Benoit Lavigne said...
These guys think too much about growth stats. Facebook is using some very dubious recruiting techniques, like sending invites to everybody on a contact list that is not on facebook. It's happened to me and is very embarassing to have a "Please come see my photos" sent to my bosses, ex wives, and people I am in legal challenges with.
In short, number are not what counts, but providing a good service that people enjoy using should be the main focus. It seems the older these companies get, the more they forget this point and focus on the stats. Then a new guy comes along and it's bye-bye.
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6-14-2009 @ 12:03PM
Amit said...
There is a big difference between Facebook and MySpace though...
Facebook is founded on "quality data". We use our real names and real information on Facebook. MySpace for years has been a cesspool of vain self-promotion. It was never really designed to have users connect at a level beyond what was previously available on other web properties.
Because of this, Facebook will have the longevity to survive any competitor aiming to make them irrelevant. Facebook, looking long-term (i.e. 3-5 years) will remain relevant to people's lives because they have invested so much time to add "real" information, and so much time developing strong connections with other users.
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6-15-2009 @ 1:58PM
Doubledown Tandino said...
Yup.
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6-30-2009 @ 3:28PM
JoAnne said...
There are so many more productive, worthwhile things that people could be doing with their work time and free time. It staggers the imagination to even consider how large the $ hit business is taking with employees twittering or facebooking the day away. Now is the time that we need to pull together and do a better job (at work) to help the economy.
The thought of teenagers having more ways to get in serious trouble with predators and the like is frightening.
Additionally, individuals are being pushed to join these services whether or not they want to. It is intrusive and invasive. With three main sites like Twitter, Facebook and MySpace, there are also scores of small companies with no ethics when asking people to join. Every day I get unwanted messages from social networking organization that I have absolutely no interest in.
Please let the madness stop!
Let's get back to work and improve the condition of the economy. Save yourself now and protect your position ... employers look at use of these toys as infringing upon their intellectual properties. You are at work to help grow your company's business, not improve your social standing.
Thanks.
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