STEALING MYSPACE The Battle to Control the Most Popular Website in America By: Julia Angwin

1. STEALING MYSPACEThe Battle to Control the Most Popular Website in AmericaBy: Julia Angwin By Devon Schweizer Marketing 450

2. Launched on August 15, 2003 by Chris DeWolfe and Tom Anderson as an imitation site of Friendster.com • The ability to make custom profiles was originally a mistake by programmers • This “mistake” actually made the site unique and hugely popular with Teens who wanted to express themselves online. • User numbers grew entirely through WOM • 1 month after launch had 6,000 users • Acquired by News Corp in 2005 for almost $600 million • Today MySpace has over 65 million users in the U.S. and 125 million users worldwide

3. Key Players • Chris DeWolfe • DeWolfe was born in 1965 and grew up in Portland, Oregon and later attended the University of Washington in 1984. • He received a degree in finance in 1987, and a master’s degree from USC in 1997. • Through Friends and contacts he gained access to the Internet economy in 1999 at XDrive, an online storage company • Met Tom Anderson at Xdrive before both of them were fired. • Started ResponseBase with Anderson in 2001 which specialized in e-mail marketing

4. Key Players • Tom Anderson • He was born in 1970 and grew up in Escondido, CA • Dropped out of high school and gained an interest in Internet Hacking • Became Friends with famed hacker Bill Landreth known as “the Cracker” • 1985 Anderson’s equipment was actually confiscated by the FBI • 1989 published a How-To book on Computer Networking • In 1994 he enrolled at UC Berkley & later went on to graduate school at UCLA • Continued dabbling in the Internet, playing in various bands, and developed an Interest in Pornography, reportedly operating a site called TeamAsain.com • When he was 30 he participated in a focus group at XDrive and was hired as a copywriter where he met Chris DeWolfe

5. In 2001 DeWolfe and Anderson started ResponseBase, an e-mail marketing company that specialized in mass e-mail advertising (Spam). One of ResponseBase's 1st customers was MySpace.com an online storage company. The company went bankrupt and DeWolfe bought the domain name with no idea at the time what to do with it. ResponseBase started making a profit and gained the attention of an online acquisition company eUniverse. eUniverse bought ResponseBase for $3.3 million ResponseBase and eUniverse

6. The Birth of MySpace • ResponseBase was gaining negative attention for some of its shadier practices. eUniverse decided they needed to change direction. • The huge popularity of Friendster.com gave Tom the idea to start an imitation site that would give people greater freedom to meet people • Some ideas for a name was YoPeeps.com or Comingle.com, but finally decided on MySpace.com • eUniverse launched a contest among workers to attract new users to the site • Biggest recruitment came courtesy of Tila Tequila and her 40,000 friends on Friendster

7. Internal Drama • In 2003 eUniverse was running into financial problems and having growing concerns about its CEO • The board decided to stage a coup and Richard Rosenblatt was named the new CEO. • To make a fresh start Rosenblatt decided to rename eUniverse Intermix Media • MySpace was ready to be its own company but Rosenblatt had no intention of letting it go. • In 2004 eUniverse was in terrible financial shape and needed an investor but did not want to lose primary ownership of MySpace. • Rosenblatt decided to sell 25% ownership of MySpace to RedPoint Ventures for $11.5 million • In order to maintain Intermix’s controlling interest in MySpace, they created a Schmuck Insurance Clause

8. Schmuck Insurance • Rosenblatt was beginning to realize that MySpace was worth about $500 million • In the Schmuck clause, Intermix had retained the right to buy back the 25% sold to RedPoint for $125 million if more than 50% of Intermix was purchased. • If in 1 year MySpace could be purchased independently for more than $125 million or go public, they would be exempt from the Schmuck clause. • It became a race to the finish line and News Corp started secretly pursuing Intermix so as not to tip off MySpace • The secret purchase was coined “Project Ivory” by News Corp • MySpace found out later that Intermix had been purchased for $580 million when Intermix turned around and repurchased the rest of MySpace’s ownership.

9. MySpace Under Fire and News Corp to the Rescue • MySpace was starting to have problems due to the risqué and borderline pornographic photos of users • Connecticut Attorney General Richard Blumenthal also decided to investigate MySpace and its possible connection with several sexual assault cases. • News Corp stepped in and assigned their best lawyers to help MySpace • Immediately after meeting Blumenthal 2 more sexual assault cases were reported. Both involving overage men who had been arrested for having sex with girls 13 and under who they met on MySpace. • A “moral panic” over online safety began nationwide • MySpace was spurred to increase security and safety measures

10. MySpace Today • In April 2009 News Corp announced Chris DeWolfe was stepping down from CEO of MySpace but would remain on the board. • Tom Anderson is currently still President of MySpace but may also be changing his role in the company • In 6 years MySpace went from a small company with 7 employees to almost 1,600. • MySpace remains unique by allowing users to represent themselves any way they choose and by giving users a tremendous amount of freedom on the site. • MySpace has almost 130 million users world wide and shows no signs of slowing down.