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Case Study: MySpace

Case Study: MySpace. Team Outliers: Josel Cates, Danielle Ross, Vince Tam, Lulu Xu. BACKGROUND. MySpace launched in Jan. 2004 and by July 2006 had 90 million users Decline thereafter, possibly because of Facebook's introduction

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Case Study: MySpace

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  1. Case Study: MySpace Team Outliers: Josel Cates, Danielle Ross, Vince Tam, Lulu Xu

  2. BACKGROUND • MySpace launched in Jan. 2004 and by July 2006 had 90 million users • Decline thereafter, possibly because of Facebook's introduction • With the launch of Facebook platform, amount of users increased by 15% in just one month

  3. RECOMMENDATION • MySpace should decide to launch their own developer program • Why? • Pros vs. cons for 2 options • Join Google's OpenSocial • Launch MySpace's Own Developer Platform • Internet stats and financial data

  4. OPTION 1: JOIN GOOGLE'S OPENSOCIAL PROS • Ability to match Facebook Platform quickly • No expense or major investment CONS • Huge uncertainty • At this point in time, Google was not a leader in any online services categories • Lack of application exclusivity • MySpace competitors can utilize same applications • Inability to extract payments from developers due to lack of differentiation between social networks

  5. OPTION 2: LAUNCH MYSPACE’S OWN PLATFORM PROS • Ability to compete directly with Facebook • More control over timing and design of the platform • Easier to extract payments from the application providers • Will work better to increase site traffic • Attract more advertisers • Satisfy minimum traffic level required by the deal with Google CONS • More costly than joining OpenSocial

  6. Exhibit 2: Unique monthly visitors increasing at a faster rate for Facebook than MySpace

  7. Exhibit 4: By Nov. 2007, Facebook users viewing more pages per visit than Myspace, which drives impressions for advertisers and increases revenue for Facebook, so Myspace should mirror Facebook's model

  8. Exhibit 5: Average length of stay per visit declined from 28 to 24 minutes for Myspace, so need to keep applications unique in order to keep users on MySpace to drive ad revenue

  9. Exhibit 6: Internet content spending has increased most rapidly for entertainment categories, so it is most important to develop the entertainment aspects of MySpace, like apps

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