Wall Street Journal Senior Technology Editor Julia Angwin, author of the informative and important new bestseller Stealing MySpace: The Battle to Control the Most Popular Website in America, was kind enough to answer a series of questions about the ideas presented in her book, the popular website MySpace in general, and on the internet company's future.
Your book is titled Stealing MySpace: The Battle to Control the Most Popular Website in America. What was the background to choosing this topic and title?
Julia Angwin: Stealing MySpace refers to several aspects of MySpace's history.
First, the founders of MySpace stole the idea for their site from Friendster, which was the popular site of its time.
Second, one of the defining dramas of the book is the covert sale of MySpace to Rupert Murdoch by MySpace's parent company, an Internet company called Intermix. The MySpace founders were completely cut out of the secret deal with Murdoch until the last minute.
Finally, the MySpace founders struggled to gain control of their site once they were owned by Murdoch's News Corp.
The story of MySpace is one of extraordinary business growth. What do you consider the most important factors in the popularity of MySpace?
Julia Angwin: One of the most important factors in MySpace's success was a mistake they made in the early days. The programmers who built MySpace forgot to block users from entering HTML in their profile information. Soon, users discovered they could customize their pages with their own graphics.
At first, MySpace considered blocking HTML. But they quickly realized that the users loved it, so they kept it. Customizable profile pages are now a hallmark of MySpace and still one of its key competitive advantages over other social networks.
MySpace also embraced freedom of expression in other ways. Unlike other sites like Facebook, and Friendster before it, MySpace allows users to create any identity they like online. Today, MySpace is home to thousands of people pretending to be everything from Coca Cola to Britney Spears.
Julia Angwin (photo left)
The unlikely success of founders Chris DeWolfe and Tom Anderson resulted in a high stakes bidding war for ownership of MySpace. Were the founders prepared for the bidding competition between media heavyweights Rupert Murdoch and Sumner Redstone?
Julia Angwin: The founders of MySpace, Chris DeWolfe and Tom Anderson, did not foresee how popular their Web site would become. When they launched MySpace as a division of parent company called Intermix, they agreed to a complex ownership arrangement with Intermix that contemplated a maximum value of $125 million for MySpace.
When it became clear that MySpace's value far exceeded $125 million, this agreement gave MySpace a powerful incentive to sell itself or file for an initial public offering. MySpace chose the latter route, but failed to foresee that Intermix would also have a strong incentive to capture the full value of MySpace by selling itself first.
MySpace has long been just one step ahead of the pornographers, sexual predators and identityspoofers. How has MySpace combated these problems and have they been successful?
Julia Angwin: MySpace has had a difficult time balancing the sometimes competing demands of safety and anonymity. Unfortunately, stories crop up every day of people using the shield of anonymity on MySpace to ill-effect, often through cyber-bullying or sexual solicitation.
However, on the other side of the coin, law enforcement officers have used MySpace very effectively to prevent crimes such as school-shootings and to lure sexual predators. MySpace also employs teams of people who search out and delete pornography on the site.
MySpace faces fierce competition from Facebook and from other social media including Twitter. Can MySpace retain its market share or is the company declining in popularity among its core users?
Julia Angwin: MySpace is in a difficult space right now. It is still dominant in the U.S., but its domestic audience has been stagnant for six months. Meanwhile, Facebook has been growing like a weed and has already surpassed MySpace overseas.
MySpace's biggest problem is lack of innovation. MySpace has focused on creating celebrity and music content at the expense of adding new features. MySpace has not kept pace with Facebook in terms of features like the News Feed, and personalized privacy settings. MySpace was also slow to embrace its status as a “platform” for other software developers – allowing it to lose ground to Facebook.
MySpace Logo (photo left)
How is MySpace changing to meet its many challenges, both in content management and from competitors?
Julia Angwin: News Corp. has just hired Jon Miller, former CEO of AOL, to oversee digital initiatives across the company with a special emphasis on MySpace. He has a tough task ahead of him.
Is MySpace's future as a company bright or cloudy?
Julia Angwin: MySpace's future is cloudy. The Google deal that guaranteed MySpace $900 in advertising revenue over three years is set to expire next year. It's not clear if MySpace will be profitable without the Google revenues.
At the same time, MySpace is facing management turmoil. Its Chief Operating Officer Amit Kapur just left, along with two top engineers. The contracts for MySpace founders' Chris and Tom are set to expire in the fall.
What does the MySpace story teach us about Web 2.0 business models and valuations of internet based companies?
Julia Angwin:MySpace is the first truly successful Hollywood Internet company. Most Internet startups have been founded by techie engineer types. MySpace was founded by cool Hollywood kids; before founding MySpace, Chris DeWolfe and Tom Anderson dabbled in spam, spyware and pornography. Their success proved that the Internet industry is not just for geeks.
What is next for Julia Angwin?
Julia Angwin: I'm back at the Wall Street Journal working as a technology editor and writing columns. I hope to write another book soon, I really enjoyed writing this one!
My book review of Stealing MySpace: The Battle to Control the Most Popular Website in America by Julia Angwin.
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