MySpace to Reinvent Web 2.0?
News Corporation’s COO Peter Chernin told investors at the Merrill Lynch Media & Entertainment Conference that MySpace could move to develop its own applications to rival or dominate other Web 2.0 services:
“If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flickr, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace … There’s no reason why we can’t build a parallel business … Given that most of their traffic comes from us, if we build adequate, if not superior, competitors, I think we ought to be able to match them, if not exceed themâ€
It may be naive, but I can see two issues with this strategy.
(a) Part of the appeal of MySpace is to be able to plug-in bits of media - movies, pictures and music - from other web services. “One of its most popular attributes,” according to Pete Cashmore. Removing this ability could increase the appeal of competitors like Facebook which has opened its API to third party developers and is soon to open its doors to non-academic members.
The claim that other Web 2.0 services are ‘driven’ by MySpace runs both ways, I think. Isn’t MySpace’s success partly driven by the availability of all these other services?
(b) Doesn’t MySpace save money and increase its profits by having other providers host and serve videos/pictures/music that are then placed on its members’ pages? YouTube, for example, is rumoured to be paying $1mn a month in bandwidth costs. Take into account that MySpace is expected to make just $350mn in revenues this year and only just profitable at that level. Result of running own video service = serious loss.
