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Mon, Mar 30, 2009 - Page 10 News List

MySpace shrinks as rival Facebook grabs online users


The “Place for Friends” is starting to feel lonely.

MySpace, the Rupert Murdoch-owned Web site once synonymous with social networking, is losing popularity and key staff in its biggest troubles since launching five years ago.

The latest figures show that Murdoch, who also owns newspapers around the world, is being beaten in the fight for social networks.

MySpace suffered a drop in visitor traffic last month and is now less than half the size of its younger rival, Facebook.

Three executives recently quit the one-time darling of the Internet and there is speculation its co-founders will follow.

MySpace’s loss of status as the cool place to be is an object lesson in the notoriously fickle Internet, where today’s cultural icon is tomorrow’s passing fad.

From humble origins in 2003, the site led the so-called “Web 2.0” revolution in which users could create their own profile pages and share content with friends.

Murdoch’s purchase of MySpace for US$580 million was seen as a masterstroke as membership continued to soar, with celebrities and politicians joining the craze.

But then came Facebook, founded by Harvard student Mark Zuckerberg, which soon snowballed with an older and apparently more affluent demographic to steal MySpace’s crown.

Gradually newspaper coverage of social networks switched from references to “MySpace and Facebook” to “Facebook and MySpace.”

The rise of Bebo also undermined MySpace’s dominance, while Twitter is among the latest novelties eating into users’ attention spans.

MySpace had 124 million monthly unique visitors last month, a decline of 2 percent, the marketing research company comScore said.

Facebook, by contrast, racked up 276 million unique visitors, an increase of 16.6 percent.

Michael Arrington, co-editor of the influential industry blog TechCrunch, posted: “What was a bad situation in November 2008 is starting to turn outright ugly — Facebook is now well over twice the size of MySpace ... It was less than a year ago that MySpace and Facebook were the same size.”

There are clues behind the scenes that all is not well at Murdoch’s Fox Interactive Media, which runs the site.

Amit Kapur, MySpace’s chief operating officer, resigned after little more than a year in the post to set up a new company.

He will be joined by Jim Benedetto and Steve Pearman, senior vice-presidents of engineering and product strategy.

The exodus comes amid speculation of further departures and rumors that MySpace’s cofounders, Chris DeWolfe and Tom Anderson, could also walk away in October after the end of their contracts, each worth US$30 million over two years.

MySpace is clinging on to a marginal lead over Facebook in the US, but trails badly in Europe.

Nick Thomas, an analyst at Forrester Research, said: “In the last 12 months Facebook has extended its dominance in every territory in Europe.”

he said: “I’m not convinced that it’s terminal for MySpace. The battle isn’t over yet.”

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