The Day Myspace's Tom Anderson Joined Facebook (Social Blade Theater)
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MySpace Founders Leaving Company
Founders Step Aside at MySpace by Juia Angwin and Emily Steel, WSJ.com
The founders of MySpace are leaving the helm of the pioneering Web site that made social-networking a mainstream phenomenon, as owner News Corp. seeks to reinvigorate the once-hot property it scooped up four years ago.
The stepping aside of Chris DeWolfe and Tom Anderson, whose contracts weren't due to expire until October, represents a pivotal test for the viability of social-networking sites. While social-networking sites such as MySpace and Facebook have exploded in popularity in recent years, they have struggled to generate the kind of revenue and earnings prospects that can sustain them as businesses over the long haul.
News Corp. now aims to show that a large conglomerate, with a portfolio that includes many old-media properties including newspapers, can succeed at that task.
People familiar with the situation said News Corp., was completing a deal to name former Facebook Chief Operating Officer Owen Van Natta as chief executive to succeed Mr. DeWolfe. He would report to Jon Miller, the former AOL chief executive who was recruited to join News Corp. this month in a newly created position of chief digital officer.
Charged with all News Corp.'s stand-alone digital properties, he was particularly given the mission of shoring up MySpace. Spokeswomen for News Corp. and MySpace both declined to comment beyond a news release. Messrs. DeWolfe, Anderson and Van Natta couldn't be reached for comment.
News Corp. sees MySpace as critical in its transformation from a conglomerate of traditional television, movie and newspaper businesses to a new-media titan. But while MySpace grew quickly following News Corp.'s purchase, last year its revenue fell short of executives' targets, according to people familiar with the matter. News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.
MySpace is still the dominant social-networking site in the U.S. But its U.S. audience has fallen this year. In March, MySpace attracted 70.1 million unique visitors, down 3.6% from a year ago, according to comScore Media Metrix.
Meanwhile, Facebook is nipping at its heels. Facebook surpassed MySpace's world-wide audience a year ago, and is growing fast in the U.S., with 61.2 million unique visitors in March, up 72% from a year earlier. Facebook also has made international expansion a priority, pressuring MySpace.
More broadly, MySpace, like other social-networking sites, still must overcome doubts about the medium's viability. Advertisers, for one, remain leery. "Advertising doesn't fit so neatly into a conversation that people are having among themselves," says Tom Bedecarre, chief executive of independent digital-ad firm AKQA. "The interruptive model of advertising hasn't been successful."
MySpace was founded in 2003 by Messrs. DeWolfe and Anderson. Their email marketing division of a Los Angeles company called eUniverse, which later renamed itself Intermix, was floundering, so they imitated a popular site at the time, Friendster.
They made two key improvements on Friendster: They allowed users to customize their profile pages, and they allowed users to create any identity they liked. Friendster, like Facebook today, encouraged members to use their real names.
But just as MySpace was taking off, fueled in large part by its popularity with musicians, it was sold to News Corp. MySpace's parent company, Intermix, negotiated the $650 million deal directly with News Corp., leaving the MySpace founders out of the loop until the last minute.
News Corp. Chairman Rupert Murdoch immediately sought to mollify the founders with lucrative two-year pay packages of $30 million each, but Messrs. DeWolfe and Anderson still chafed at the fact that MySpace ad sales were taken over by executives at Fox Interactive Media, according to people familiar with the situation.
The rank and file of MySpace was also angry that their stock options were canceled after the acquisition and that they were forced to move from Santa Monica to Beverly Hills, the people said.
Relations fell apart further. Mr. DeWolfe ignored suggestions from Fox Interactive Media President Ross Levinsohn about ways to improve the site. Mr. DeWolfe also sought to amend a $900 million advertising deal that News Corp. cut with Google Inc., delaying its implementation, the people said.
Mr. Levinsohn also clashed with Mr. Anderson, who is president of the site. Mr. Anderson controlled the product development and was criticized for not moving fast. In April 2006, MySpace bought the online karaoke service kSolo. MySpace launched the karaoke feature on its site in April 2008, two years later.
The tension between the MySpace founders and News Corp. eventually led to Mr. Levinsohn's dismissal in November 2006. He was succeeded by his distant cousin, Peter Levinsohn, who eventually gave Mr. DeWolfe control of the advertising sales at MySpace that he had sought.
All this time, Facebook was steadily gaining on MySpace. Founded by Silicon Valley computer programmers as a social network for Harvard students in 2004, Facebook expanded to other college campuses and opened to everybody in 2006. Facebook focused on building innovative features and encouraging third-party software developers to write applications to run on Facebook.
Meanwhile, MySpace, with its marketing and music background, fought back with entertainment, such as a celebrity news site and an expensive music joint venture.
Last April, Facebook edged out MySpace in terms of world-wide unique visitors and has continued to steadily gain in the U.S. Three top MySpace executives, including Amit Kapur, former chief operating officer, left the company in March to work on a start-up. MySpace has yet to name successors for those positions.
Mr. Miller began discussing the job with potential candidates including Mr. Van Natta, but hadn't finalized anything when the news of the talks leaked, according to people familiar with the situation.
Mr. Van Natta helped expand Facebook but stepped into a less prominent role as chief revenue officer as the site grew, ultimately leaving the company in February 2008. At MySpace, he could serve as a bridge between Silicon Valley and MySpace, which has struggled to match Facebook's technology prowess.
Hearing of the talks, Mr. DeWolfe offered to resign, these people said.
Jessica E. Vascellaro contributed to this article
Struggling with an Online Identity
On the Internet, we are faced with the extreme choice of pretending to be a rock star on sites like MySpace, or building a single personality that suits all our audiences on sites like Facebook, LinkedIn or Twitter.
This is one of the paradoxes of the Internet age: the freedom of the Internet is also constraining. The image we project of ourselves online, what some academics call "unitary identity," becomes our defining image for all audiences. It does not allow us to shed a past identity or recreate ourselves, or to project different images to different audiences.
MySpace was founded partly as a reaction against the constraints of unitary identity on a hot Web site called Friendster. It was 2003, and Friendster had improved on the concept of building individual Web pages by allowing people to link their Web pages to those of their friends.
In the language of sociology, Friendster's innovation led to better online "signaling." The relationship between the signals we send about ourselves and our true selves are the topic of a social science called "signaling theory."
"Most of the qualities we're interested in about other people, Is this person nice? Trustworthy? Can she do this job? Can he be relied on in an emergency? Would she be a good parent? are not directly observable. Instead we rely on signals, which are more or less reliably correlated with underlying quality," Judith Donath and Danah Boyd wrote in BT Technology Journal in 2004.
Friendster allowed people to factor in a person's friends as part of the signal, leading to fuller and better signals. However, Friendster made a big mistake: It discouraged members from pretending to be someone they weren't. That meant no "Fakesters," people pretending to be Homer Simpson or God or Harvard University or a dog. It also meant no "Fraudsters," people pretending to be someone else, such as Britney Spears or their cousin Billy.
"The whole point of Friendster is that you're connected to somebody through mutual friends, not by virtue of the fact that you both like Reese's Peanut Butter Cups," Friendster founder Jonathan Abrams told the San Francisco Weekly at the time.
The "No Fakester" approach violated one of the Internet's central tenets, anonymity, best embodied by a Peter Steiner cartoon in the New Yorker from 1993 showing a dog in front of a computer screen with the caption, "On the Internet, nobody knows you're a dog."
To many, the power of anonymity is not a luxury but a necessity, the essence of freedom. By gathering online anonymously, people are free to find others who share their political views or their sexual orientation without fear of repercussion.
As a result, many of Friendster's users revolted. They decried the "Fakester Genocide" on Facebook and vowed to start a "Fakester Revolution." They wrote a revolutionary document, the "Fakester Manifesto."
The first declaration:
"Identity is provisional. Who we are is whom we choose to be at any given moment, depending on personality, whim, temperament, or subjective need. No other person or organization can abridge that right, as shape-shifting is inherent to human consciousness, and allows us to thrive and survive under greatly differing circumstances by becoming different people as need or desire arises. By assuming the mantle of the Other, it allows us, paradoxically, to complete ourselves. Every day is Halloween."
In the Fakester revolution, the founders of MySpace saw an opportunity. Founded in 2004, MySpace copied the basic features of Friendster, but welcomed Fakesters and allowed users to customize their pages with wallpaper and colorful layouts.
MySpace did not even seek to verify the email addresses of people who registered on the site-a standard practice on the Internet. MySpace imagined itself as an interactive replacement for MTV, a place where everyone could be a rock star.
"People kept telling us, 'You have to have a closed network,'" MySpace co-founder Tom Anderson later recalled in an interview with Fortune magazine. "'People will want to talk only to friends they already know.' We just didn't believe it. We never wanted to limit people from talking to each other."
As a result, the process of "friending" on MySpace took on a different tone than on Friendster. On Friendster, because people used their real identities, they tended to friend people they knew in real life. On MySpace, where fake identities flourished, friending did not imply that the two people knew each other.
Venture capitalist Jeremy Liew describes MySpace as a game where the winner is the one with the most friends. Like most videogames, he says, MySpace also has levels. Novices start with a rudimentary profile. Then they realize they have to take actions such as requesting friends or leaving comments on others' pages to get to the next level.
"People are competing," Mr. Liew said. "They're trying to win and doing things to try to make them win."
Rock bands, pinup girls such as Tila Tequila, and comedians such as Dane Cook all competed to gain the largest number of friends on MySpace, propelling its popularity. In 2005, News Corp. noticed the success of the fledgling Web site MySpace, and snapped it up.
MySpace is now the most popular social network in the United States, with 70 million unique visitors in February 2009, according to comScore Media Metrix.
As MySpace has grown, so have its problems. Every day brings another story of a sexual predator, cyber-bully or others with bad intentions donning the mask of anonymity to ill-effect on MySpace. A Web site called MyCrimeSpace.com, which has no ties to MySpace, keeps a daily count of criminal activity linked to the Web site. Its tagline: "A Place for Fiends" is a play on MySpace's tagline "A Place for Friends."
In February 2006, Connecticut Attorney General Richard Blumenthal launched an investigation of MySpace. He eventually gathered a coalition of attorneys general from 50 states who demanded that MySpace adopt technology to verify the ages of MySpace members and ensure that children younger than 13 do not join the site.
Mr. Blumenthal and other lawmakers argued that verifying identities would prevent sex offenders from harassing children and bullies from picking on other children online. In essence, they wanted people to send clearer signals about themselves online.
MySpace countered the complaints about safety by adding additional privacy features for younger users. It also argued that it was not responsible for the actions of users on its site. After all, the Communications Decency Act of 1996 grants Internet providers immunity from liability for third-party content.
In February 2007, MySpace won an important court victory when a Texas court dismissed a lawsuit by the mother of a 14-year-old girl who was sexually assaulted by a 19-year-old she met on MySpace. The widely publicized lawsuit charged MySpace with negligence and fraud for failing to take reasonable safety measures to keep young children off its site. But U.S. District Court Judge Sam Sparks ruled: "If anyone had a duty to protect Julie Doe, it was her parents, not MySpace."
Anonymity also has received constitutional protection in the past. "Anonymity is a shield from the tyranny of the majority," Justice John Paul Stevens wrote for the majority in a 1995 opinion, McIntyre v. Ohio Elections Commission. But he acknowledged, "The right to remain anonymous may be abused when it shields fraudulent conduct.
But political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse."
Even so, identity verification is enjoying a renaissance on Facebook, which has returned to the closed Friendster model of requiring people to use real identities. The popularity of Facebook, which has eclipsed MySpace's audience world-wide in terms of unique monthly visitors, shows that people are willing to trade in their privacy for the privileges of joining a community based on trust.
\People often disclose their real email addresses and phone numbers on Facebook, since their profile information is automatically restricted to their approved list of friends. The advantage of this kind of network based on offline connections is that it is harder for sexual predators and others with bad intentions to penetrate.
Facebook improved on Friendster's model dramatically in November 2006, when it launched the News Feed-a feature that provided members with updates about their friends' activities on Facebook. For instance, if a Facebook member added new photos to his or her profile page, friends would be notified in a news item on their own profile pages.
This seemingly simple innovation was, in fact, technically quite difficult. It has also proven to be a powerful signaling mechanism. Facebook members use the "status update" feature to signal everything from their emotions to location.
Inevitably, in 2006, a new service started,Twitter, that distilled the status update into a standalone service. Unlike Facebook, however, Twitter has returned to the MySpace model of allowing people to assume any identity they like. Last month, Facebook had 275.6 million unique visitors world-wide, MySpace had 123.5 million, and Twitter had 9.8 million, according to comScore Media Metrix.
The problem is that all these sites, Facebook, MySpace and Twitter, constrain us to sending one "signal" to many audiences. Harvard Business School professor Mikolaj Jan Piskorski has written about the need to send different signals at different times.
When looking for a spouse, Mr. Piskorski wrote in an unpublished paper, "it is important to signal capacity for commitment." But by broadcasting their signals amid the multitudes of signals on a social network, would-be-romantics risk appearing uninterested in commitment, he says. As a fix, he suggests sending out messages on just a dating site.
That said, for job-seekers who don't want their bosses to know they are looking for work, Mr. Piskorski argued, mingling their signals with non-job seekers is effective. "By pooling themselves with actors who are using online networks to utilize their social capital better, the employed job seekers can be on the market, while claiming that they are not," he wrote.
What we need are better controls over which signals we are sending to our various online audiences. In its controversial redesign this month, Facebook has taken a step in that direction by highlighting "friend lists" that allow members to control which of their friends' updates they would like to view.
But Facebook has not taken the next step of allowing members to send different updates to different groups of friends. For example, I would like the option of sending a cheery update about the start of an out-of-town conference to colleagues, while griping to my friends about having to spend time away from my family.
Apparently, I'm not alone: Twitter says the ability to segment tweets for different audiences is its top-requested feature, but it hasn't had a chance to build it yet.
It seems MySpace was right to dream of allowing everyone the freedom to tap their inner rock star. But that now looks like a teenager's dream. As we've all grown up now, we want our multiple digital identities to more closely mirror our contradictory selves.
