Stealing MySpace: A Review With Its Hard-Knocks Lessons for Starting a Social Networking Website

Stealing MySpace: The Battle to Control the Most Popular Website in America, is an unofficial but well-researched account of the rise of this popular, scrappy social networking website.  Julia Angwin, technology editor of the Wall Street Journal, charts the story — from a Friendster rip off in 2003 through the purchase by Rupert Murdoch’s News Corp., to a category leader in the spring of 2008.

I read Stealing MySpace first because I love a good business tale.  The book is a rollicking adventure story of struggling entrepreneurs, Silicon Valley bigwigs, wrinkle cream marketers, social network predators and aspiring porn stars.

Second, I picked the book up because I’m still circling around MySpace, trying to understand it, especially as it related to marketing, advertising and business.  (Yes I set up a profile, an outpost, for SCORE Chicago.  Please find us and become a fan.)

Here’s what I discovered in Stealing Myspace that applies to the building of social networking websites:

Clear product differentiation is key. Friendster, the early MySpace competitor, was a closed network which required members to use real names and have a verified email address.   MySpace decided to become an open network, permitting anyone to join and use whatever identity they wished.  Lesson:  Have a special something that makes you unique.

Accidents sometimes become features. Early developers, understaffed and exhausted, made a mistake when they permitted users to edit the HTML of profiles.  The staff only discovered this hole when users started uploading background graphics files.  “The ability to cut and paste features directly into MySpace pages appealed to a generation of teenagers who were used to downloading music from the internet and ‘mashing up’ songs to create remixes,”  says Angwin.  Too busy with other issues, managers decided not to patch the code.  Soon this ability to customize and add flashy doo-dads became a signature of the site.   Lesson.  Mistakes can become opportunities.

Having no money to market forced founders Chris DeWolfe and Tom Anderson to use guerrilla tactics. In the early days, the owners grew the site by encouraging bands to set up profiles to promote to their fans — free online marketing even for five guys jamming in a garage.  When the owners threw the first local MySpace parties with those bands, mostly men (“all dudes”) showed up.  To get chicks, they persuaded LA fashion photographer Ted Skillet (specialty: “shooting booty”) to take free photos of all attractive women who came.  From then on, both MySpace and its local parties were filled with pretty, sexy babes.  Hollywood types, with their insatiable promotion needs, were also early users of MySpace, as was the porn industry.  (“By one estimate, 95% of porn industry professionals have MySpace pages that they check daily.”)  Lesson: Find people who need to promote and make it easy and fun.

Timing matters. By chance, MySpace was launched just as digital photography became mainstream and restrictions increased on the sharing of MP3 files.  The open HTML code in MySpace profiles permitted members to link to photos in sites like Photobucket.  Similarly, bands now could uploaded their own digital music clips for their fans.  These new capabilities both drew users.  Yet another stroke of luck:  Vietnamese model and pinup star Tila Tequila got fed up after Friendster deleted her profile 5 times.  She moved to MySpace, inviting 40,000 of her friends to join her.  Lesson:  Be lucky.

The road to financing growth is very bumpy. The bulk of Stealing MySpace is about how the site was sold and merged and partially funded, and how its owners struggled through all these transitions.  Lesson:  Financing for social networking sites is a rough ride because of their unproven revenue potential.

Business models didn’t matter, and then they did. Going head to head with Friendster in the early days, the owners were all set to move to a subscription model to match them.  However, Friendster canceled those plans, leaving DeWolfe and Anderson scrambling for an alternative business model.  They decided to sell ads, despite the site’s racy and unpredictable content.  After a rocky start and under pressure from mainstream advertisers, they carved out relatively clean ad space on pages near movies, comedy and horoscopes.  Eventually the site incorporated applications and associated products.  Lesson:  Social networking sites are still figuring out ways to profit from their massive user attention and traffic.

Social networking sites are about identity, according to social scientists.  Angwin contrasts the identity philosophies of MySpace with its new big competitor Facebook:

“MySpace represented the freewheeling spirit of the web, where anonymity allows people to experiment with their identity and express their views freely.  In contrast, Facebook represented a more structured view of online identity, where people authenticate their offline identity in hopes of creating a community of trust.”

Social scientists suggest that, in addition to personal data in a profile, one’s friends are part of the “signals” of identity.  Thus the public display of a friend list “signals reliability of one’s identity claims.”  Lesson:  Our identities are more fluid than we would like to think.  Perhaps also we are still sorting through a world-wide  identity crisis caused by the internet.

Selling on MySpace is a prohibited activity, but people do it. Andwin says low key selling is un-policed.  I note Amazon, ITunes and Paypal buy-buttons on this Pink Spiders Band profile, in addition to their merchandise tab.   But the terms of service prohibit activities including “commercial activities and/or sales without prior written consent from MySpace such as contests, sweepstakes, barter, advertising, or pyramid schemes.”   Lesson:  It’s hard to enforce terms of service and promotion on social networks?

If you are involved in starting or managing a social networking website, you will empathize with the trials and triumphs depicted in Stealing MySpace.  You might even pick up some tips to avoid their pitfalls.  In any case, it’s a lively story complete with porn stars, email spammers, deal makers, major media players and a generation of disaffected youth in search of self expression.

Are you on MySpace?  Come be a fan of  SCORE Chicago. And please talk to me in a comment about how you informally promote your business on the MySpace.

– Peg Corwin

Sample MySpace profiles for the uninitiated, complete with music and bling:

Pink Spiders band — early band on the site

ChicagoPunkPix — photographer who specialized in bands

CherryCoke — a brand website (there are many imitators)

Small Business – profile with almost 1,000 small business fans

Molly at Infolode — marketing for bands and musicians

Tom Anderson — MySpace founder

Tila Tequila — Vietnamese model and pinup star

Celebrity page

Related Link:

Putting Your Best Faces Forward Julia Angwin’s recent article about online identities in the Wall Street Journal.

Tagged as: Julia Angwin, start a social network, Stealing MySpace