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In the 2000s It Was The Dominant Player In Social Networks Yet It Never Achieved The Success of Facebook

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At its peak Myspace was the most visited website in the US – yes that’s right it was even ahead of Google in the mid 2000s and as a result it was worth billions of dollars.

As one of the early pioneers of social media, things were looking good for the Los Angeles startup as it looked like they were destined to dominate the industry for years.

But if you ask anyone today if they have a Myspace account you can see how far the company has fallen.

MySpace Founders Tom Anderson And Chris DeWolfe

There are a number of reasons that lead to their demise and whilst they did face stiff competition from fellow Californian startup Facebook, it was more than just competition that resulted in the downfall.

How It All Started

Founded in 2003 by former eUniverse internet marketing employees Tom Anderson and Chris DeWolfe the duo were inspired by the success of Friendster – a Malaysian social networking site.

Anticipating a wave of new social networking sites coming to market the pair knew that they had to get the site up and running quickly.

It was 2003 and the internet, although not in its infancy, wasn’t as easy and accessible as it is today. There was no WordPress and to start the site from scratch would have taken considerable time and money…but there were some tools which made the job easier.

ColdFusion was one of these tools and the software enabled the company to get the site up and running within 10 days. Although this selection of software was a real time saver it would later transpire that this one decision right at the start would play a major role in the company’s demise later on.

In the meantime the company were up and running and users were signing up in in the hundreds of thousands.

Tom Anderson’s profile image became world famous as anyone who signed up instantly became “friends” with him.

Tom was everyone’s first friend

The company’s phenomenal growth attracted a number of investors who wanted a piece of the action but it was Rupert Murdoch’s media company News Corporation that managed to get a deal over the line – purchasing Myspace for $580 million.

The purchase sent shockwaves throughout the industry as it was the first time a traditional media company was taking their online audience seriously.

At the time the company’s future looked like it would go on to international dominance but ironically, it was at this point everything started to go wrong.

Beginning of the End

If you have seen the movie “The Social Network” you will know Sean Parker – the guy Justin Timberlake played. Parker is known for being a serial entrepreneur and was instrumental in the growth of Facebook.

But Parker is on record stating that Facebook would never have overtaken Myspace but for the sheer “incompetence” of their management.

Ouch! – But is there any truth to it??

It’s always easy to say in hindsight why the company got it wrong but some decisions seem so obvious that you do start to question the company’s actions.

In 2005 MySpace had the opportunity to purchase Facebook for $75 million but rejected it on the basis it was too high a valuation.

At the time Myspace had ten times more traffic than Facebook with over 300 million registered users and had a market value of $12billion. It was a bad decision but an understandable one.

Facebook And MySpace Popularity. Credit:Google Trends

The takeover by News Corporation added a level of bureaucracy and corporatism that the innovative startup never got used to.

The focus switched from allowing for a great user experience to monetizing the site as much as possible. This obviously had an impact on signups and the company started to see their user base decline as a result.

Added to this was their poor choice of software at the start which had become unmanageable and unable to deal with the 300,000 signups a day. In their haste the company switched to .NET which, as any developer will tell you, is not the most pleasurable experience to work with.

In contrast Mark Zuckerberg was making business decisions for Facebook in his flip flops while developers were jumping off rooftops into backyard swimming pools in Palo Alto. The focus was purely the user interface and only one of them were poised for the social media revolution that would follow.

Dodgy Reputation

Bad programming language choices and focussing on the bottom lines were all part of the downfall but these were all fixable. Not only could they be corrected but they could be done overnight.

The nail in the coffin for Myspace was the surge in complaints of harassment, bullying and minors being exposed to adult material.

Due to the company’s inability to innovate and them not addressing the issues early on their reputation started to dwindle. What was once thought of as a “the place to be” now had a reputation of harbouring seedy individuals and was not a safe place to be for users.

This reputational damage proved to be fatal.

We all know what happened next…

mark zuckerberg peeping over wall meme
Credit: Giphy

Facebook was a clear benefactor of Myspace’s demise as they were better positioned from a software point of view (by using open source software like PHP) to manage the scale of users signing up.

Within the space of a couple of Myspace were hemorrhaging users and as a result 30% of its US employees and 66% of their overseas staff were laid off. There traffic was falling on a daily basis and a newly appointed CEO lasted only 4 months.

The ship was sinking.

Murdoch had seen enough and in 2011 sold the company for $35 million to Specific Media Group together and Justin Timberlake (his casting in The Social Network doesn’t seem so random now).


MySpace is still around today and has been bought and sold between investors in an attempt to revive a once thriving company.

Although a huge factor Myspace’s failure wasn’t the result of strong competition but more as a consequence of poor fundamental business decisions that could and perhaps should have been addressed early on.

The growth of the company in such a short space of time and the News Corp. takeover should have been the foundation to go on and dominate the international marketplace but instead, they were the main reason for its demise.


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