Five years ago, Rupert Murdoch surprised the media industry by spending $580m on MySpace, at that time an up-and-coming force in the rapidly expanding business of social networking. With the acquisition, News Corp believed it had acquired a significant lead in online media through a site that boasted a huge following and good relations with the music industry.
While the site has generated plenty of cash for News Corp – at one point, advertising on the home page alone was valued at $1m a day – a series of missteps has left it in turmoil, struggling for success and flailing in the wake of its rivals.
Competition has chiefly come from Facebook, which first overtook MySpace in popularity last summer and has gone on to significantly extend its lead since then.
Figures from comScore, the internet traffic analysts, suggest that MySpace has about 57 million users in the US, down from a peak of more than 75 million. Facebook, meanwhile, has experienced incredible expansion in the past 18 months and now boasts more than 400 million users worldwide.
