Tension over ad strategy at MySpace

by Mathew on April 23, 2006 · 2 comments

Like a lot of people (judging by the links at memeorandum) I read the New York Times story on MySpace with interest, since it and Facebook are probably the poster-children for the whole online “social networking” phenomenon, or whatever you want to call it. Others — such as Clickety-Clack — have focused on the fact that Google and Yahoo aren’t that interested in advertising on MySpace because they don’t see its users as being an attractive market, since they are mostly interested in “socializing not buying.” Apart from that, however, one of the things that interested me most was the tension between the founders of MySpace — Chris DeWolfe and Tom Anderson — and the News Corp./Fox Interactive types who are now in the driver’s seat.

Although the article says that Murdoch has tried “to do nothing to interfere with whatever alchemy attracted so many young people to MySpace in the first place,” there are hints of some tension between the MySpace side and the advertising mogul side of the equation. At one point, Ross Levinsohn, the guy in charge of the News Corp. interactive media arm that now controls MySpace, talks about new ideas for revenue, and DeWolfe flatly contradicts him:

“Mr. Levinsohn, for example, said he saw opportunity in the one million bands that have established profiles on MySpace; he said MySpace could charge bands to promote concerts or to sell their songs directly through the site. In an interview the next day, however, Mr. DeWolfe dismissed the idea [saying]… “We never thought charging bands was a viable business model.”

At another point, Levinsohn talks about his plans to work advertisers into the site by giving them their own pages, in the same way that other MySpace.com users have pages, so that users can add them as “friends” and create linkages that will promote the product or service (Wendy’s has already tried this strategy, and gotten 100,000 MySpace users to add its animated hamburger as a friend). But DeWolfe disagrees with this too:

Yet here is another place that executives at Fox and MySpace don’t see eye to eye. Mr. DeWolfe discounted the idea of people creating profile pages for small businesses. “If it was a really commercial profile — the gas station down the street — no one is going to sign up to be one of their friends,” he said. “There is nothing interesting about it.”

Is this just tension between the guy who started something and the corporate executive who is trying to change it? Probably in part. DeWolfe is also no purist when it comes to advertising, since he got his start with pop-up ads and downloadable ad software similar to Comet Cursor. But it will be interesting to see how the MySpace.com user base takes to an aggressive ad push, if that’s what is coming. And it’s also interesting that the NYT article mentions that DeWolfe got the idea for MySpace from Friendster, the former poster child for social networking — and yet the piece never mentions that Friendster flamed out and was replaced by MySpace virtually overnight.

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