Tycoons Row

Company Background 

Today, MySpace is a free social networking environment that lets any user create their own personal online community of friends. It’s also a site for major corporations to leverage their brands and target the valueable demographic held by MySpace. The site allows a user to upload photos, create their own diary, post videos, chat and write to friends. According to Compete.com, the number of people in the U.S. (as unique visitors) to have visited Myspace.com on a monthly basis is 63,114,796 as of January 26, 2007. Australian born Rupert Murdoch, CEO of News Corporation, purchased the company in 2005 for $580 million. Revenue for the News Corporation in 2005 was $23.859 billion. Page views are above 13 billion monthly. There are over 105 million users/profiles on MySpace today.

The company was founded by Chris DeWolfe and Tom Anderson, building it from the ground up and catering to a target market that was sure to spread. The company marketed to bands and the music industry. 

Strategic Philosophy

The strategic philosophy for MySpace today is to continually grow through the advent of additional MySpace features. Some of the typical web2.0 features include photo posting, video posting, ability to add widgets, such as media & music players, forums and mail instant messaging. We may see this philosophy change in the future as the goal would be to increase profitability for the company. Additionally, the philosophy is to understand the value of each member. The way that MySpace will understand that value is through data mining. This will cater to MySpace advertisers in understanding their demographics & the MySpace community. MySpace will also be able to better leverage their main source of revenue which is advertising.

Mission:

The mission of MySpace is to be the premier place to share what you want, when you want with anyone you want. Through MySpace, you can basically communicate in almost anyway possible.

Vision:

As MySpace is part of NewsCorp, I think the overall vision that Rupert Murdoch has now is to leverage the MySpace community and provide the following: improved ways of managing content, a safe-haven for the community (already known problems between young kids vs. adults), and to improve the user-experience.

Existing Competitors:

Not only are there copy cat clones of MySpace, but true competitors with similar social networking platforms include: Friendster, Migente, Black Planet, A Small World, are just a few of the competition out in the web-o-sphere competing to grow a community. However, none of these at the moment will top MySpace, as it was a first-mover in this market.

Finance:

Revenue from MySpace is rolled up on the financial statements as “Other” within NewsCorp. It’s estimated that MySpace is generating aprox. $185 million yearly. Overall, it will be evident when they break even becuase it will take at least $500 million to acheive that due to the buyout from NewsCorp.

MySpaces’ business model is an ad serviced based model. Opportunities exist to generate additional revenue based on providing additional services, such as classifieds and widgets.

Operations:

Chris DeWolfe and Tom Anderson run operations for MySpace in California. MySpace is now international and is represented on 10 different countries around the world.

Overall, I’m expecting to see NewsCorp expand into other areas, and begin generating more revenue through MySpace. However, this will only be done effectively if MySpace users are given the ability to have more freedom in customizing the content and layouts of their sites. Additionally, widgets at a one-time fee that a MySpace user can customize will be more effective rather than a subscription based product/service and will offer more value to a MySpace user.