Slowdown at MySpace

November 3rd, 2006 by Barry Caplan | Tags: , , , ,

Some interesting metrics here:

It is seeing a slowdown in the domestic growth of its biggest Web property, the social networking service MySpace, which has 55 million active users, the company says.

According to the Web-tracking service Nielsen/NetRatings, the number of unique U.S. visitors to MySpace fell from 49.2 million in August to 47.2 million in September.

This possible relates to the maximum rate at which a company can grow. Does anyone have the month over month membership statistics for companies such as myspace and aol (for historical comparison purpose). It would be interesting to run certain statistical analyses against these examples, and also similar ones for various google, yahoo, and microsoft properties.

I would like to test the hypothesis that the latter are actively throttling the growth rate a bit in order to not peak and then get stuck at a local maximum. I would also be interested to see if there is evidence that there is in fact a local maximum or not.

Similar tests run against other application types and sub-types, such as games and demographics would be interesting to test as well. /Best, Barry

Fox Interactive hit by COO’s quick exit

By Constance Loizos/Mercury News

Despite supercharged growth in the 18 months since News Corp. created Fox Interactive — a 1,400-employee unit that oversees Fox’s Web sites, including MySpace — the division isn’t having the best of fall seasons.

In the latest sign of problems, Chief Operating Officer Mark Jung quietly stepped down earlier this week, just nine months after his appointment. Jung had co-founded and was CEO of video gaming company IGN Entertainment, which was sold to Fox in September 2005 for $650 million in cash.

Fox Interactive CEO Ross Levinsohn, in an interview with the Mercury News on Thursday, said that Jung, whom he called a “very good friend,” is an “entrepreneur at heart” who left Fox for personal reasons. “Mark decided it was time to move on,” he said, “but we have tremendous bench strength, so, hopefully, we won’t miss a beat.”

Jung could not be reached for comment. Levinsohn said he is stepping into the role of COO for now. “I’ll just have a couple more people reporting to me,” he said.

Fox Interactive has had other problems this year. It is seeing a slowdown in the domestic growth of its biggest Web property, the social networking service MySpace, which has 55 million active users, the company says.

According to the Web-tracking service Nielsen/NetRatings, the number of unique U.S. visitors to MySpace fell from 49.2 million in August to 47.2 million in September.

Greg Sterling, a digital media analyst in Oakland, said “Double- or triple-digit growth is hard to maintain, but some of the things that propelled MySpace to such enormous popularity may be changing. MySpace has now morphed into more of a portal. The kind of cutting-edge buzz that once defined it has diminished somewhat. And there’s a lot more competition.”

“Certainly, you aren’t going to continue to grow at the rate of 60 million users every few years,” Levinsohn pointed out. “We’re running out of people (who will register for the service) in this country, but we’re just starting to launch sites internationally.”

“We just launched in London a couple of months ago and we’re already up to 6 million users and adding 17,000 people every day.”

It’s an encouraging start, but Sterling said MySpace is taking on established leaders elsewhere, and they may not budge. “People may prefer their homegrown sites to an American company,” he said. “And cultural differences can’t be underestimated. It’s not simply the case that MySpace can show up and experience the same growth and usage that they have here.”

Fox was also miffed when search giant Google quickly and quietly acquired the video-sharing service YouTube last month for $1.65 billion. Though Fox has its own video-sharing service, MySpace Video, representatives had spoken with YouTube earlier in the year about a possible deal.

“I don’t think we would have spent $1.6 billion to acquire YouTube,” Levinsohn said. But, he added, “If you’re going to run a (sale) process of one of the hottest companies on the Internet, you should do that openly. There’s no advantage to shareholders to do these things in private. You don’t necessarily get the best value in the market. If it were out being shopped, maybe it could have sold for $2 billion.”

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