How Myspace made fatal mistake that made $12,000,000,000 company unrecognizable
In 2026, it's hard to keep track of all the different social media platforms, although they say you can tell someone's age based on which one they use. You can supposedly find Gen X sharing memes on Facebook, while Millennials are still posting boomerangs on Instagram, and Gen Z are scrolling their thumbs raw on TikTok.
It was much simpler back in the day because there were simply fewer choices, although we'll imagine some of you reading this have never even heard of Myspace. Back in the day, you wouldn't be caught dead on Facebook, as Myspace reigned supreme as the undisputed king of social media.
Sadly, the Myspace you see today is a far cry from the Goliath it once was, meaning it's hard to believe it was once worth over $12 billion.
Launched in August 2003, Myspace became the first social media platform to reach a global audience, and at one point, had more than 300 million registered users. Unfortunately, one key mistake led to its downfall.
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After growing in power over its first few years, Rupert Murdoch's News Corporation bought Myspace for a jaw-dropping $580 million in June 2006, before it then overtook Google as the most-visited site in the USA.
It's hard to pin down what exactly went wrong, but Myspace was criticized for its 'portal' strategy that saw it heavily tied to music and entertainment. While rivals like Facebook and Twitter (RIP) continued to innovate with new features, Myspace stuck to its guns and failed to move with the times.
One former exec blamed a massive $900 million deal with Google for its ultimate downfall. Although the three-year deal delivered a short-term cash windfall, it was described as a 'handicap' because it had to place even more ads on an already cluttered interface.
With Myspace having to bring in a certain number of page views to trigger Google's payment, one anonymous exec explained: “It was a good deal in the short-term but in the long term it ended up not being so good.
"We were incentivized to keep page views very high and ended up having too many ads plus too many pages, making the site less easy to use than a site like Facebook.”
Co-founder Chris DeWolfe reportedly had to fight News Corp's plan to focus on 'near-term monetization', and with Myspace being unable to experiment with new ideas, it was left to die on the vine.
Things went from bad to worse, and in April 2008, Facebook overtook Myspace in the search rankings.
It wasn't helped by a supposed lack of regulation, as Myspace never really recovered from Connecticut Attorney General Richard Blumenthal's 2006 investigation into minors being exposed to pornography on MySpace.
As Twitter targeted Myspace users, Facebook also lured in the key teen demographic with its college aesthetic and quality of life features that its rival simply didn't have.
This all culminated in the infamous 2011 fire sale, where Myspace was sold to Specific Media Group and Justin Timberlake for a reported price of just $35 million.
In the aftermath, Murdoch referred to the Myspace purchase as a 'huge mistake', and the media unfairly compared it to Time Warner's disastrous 2000 purchase of AOL.
Myspace has since changed hands several times and still exists to this day, but don't expect to get your old account back. Following a 2016 data breach, all content before 2016 was then lost in a faulty server migration that happened in 2019.
While there's no denying the power that Myspace once had, its legacy has largely been confined to that great tech graveyard alongside BlackBerry and Ask Jeeves.