Earlier this week, MySpace gave out pink slips to 500 employees, almost half its staff. While the Facebook universe is rapidly expanding, MySpace, the social networking site that lead the pack just a few years ago, is contracting, maybe fatally. The site has lost millions of followers and millions of dollars. It's been a huge disappointment for Rupert Murdoch's News Corporation, which bought the site for $580 million in 2005. Rumor has it that the site may be up for sale.
What accounts for the spectacular flame-out of the once high-flying site? Choose your favorite theory: The quest for profits squelched innovation; becoming part of a huge corporation made MySpace less nimble; moving headquarters from a Santa Monica loft to a Beverly Hills high-rise created a culture clash; a fickle public abandoned the site in search of the next new thing; there was “white flight” from the urban chaos of MySpace to the more manicured suburbaness ofÂ Facebook.
Regardless of the reasons, MySpace may become another Internet footnote. Of course it will be in good company, as the electronic landscape is littered with the wreckage of companies that soared, then crashed and burned. Remember Netscape, AltaVista, AOL? They all dominated at one point, only to see their fortunes vanish.
Not too long ago, Microsoft was considered by some to be the Evil Empire, only to be eclipsed by Google. Now Facebook is having its day in the sun, surpassing Google as the world's most visited site. How long it will hold the record is anyone's guess. But I think it's a fair bet that it won't be very long. As technology speeds up modern life, the life cycle of technology companies grows ever shorter.
Maybe a leaner MySpace will manage to soldier on, but it's doubtful it can recapture its former coolness.