Myspace, a billion dollar business failure.

 In Articles

Sean Percival, ex-VP of Myspace, sheds valuable insight into the business failure that was Myspace and the inevitable rise of Facebook.

Sean Percival, Ex-vp of myspace

This Myspace story reminded me of 2010 when I was in my university class finishing up my major in Media Arts. My all-time favorite class (media & business) was being taught by a serial entrepreneur by the name of Richard Stein. Stein had made his millions in the radio business back in the ‘80s and ‘90s. Following partial-retirement he became a volunteer teacher at my university, “just for fun”. I remember him clearly saying “Facebook is a phenomenon that I don’t understand, but it’s a phenomenon that can’t be ignored”. Ironically, this was the same year I had deleted my own Myspace page for  various reasons, one of which was that all my friends were switching to Facebook.

Fast Forward to March 4th 2020, at an event organized by 500 Startups Vietnam and Kafnu co-working space in Saigon, Vietnam. Sean Percival, the ex-vice president of Myspace is giving a keynote speech on the failure of Myspace and how Facebook took over the social media crown. One of the reasons people left Myspace, he recounted, was that their friends were no longer on the platform.This was exactly why I had left in the year 2010, and one of the reasons that eventually put Myspace on the catalog of other failed startups. 

Early infrastructure mistakes


Percival makes it very clear from the beginning that one of the biggest mistakes that Myspace made at the start of their journey was related to technical errors and infrastructure issues. As anyone might know, Myspace had the unique feature of allowing people to edit their profiles. What few people don’t know is that this was actually an error on the part of the programmers. They failed to block code from being injected into the profiles. People were thus able to program their own profiles with HTML code. Before they realized what had happened, the company had lost control. Another stumbling block which tripped them up at the start of the process had to do with their servers. They were spending huge amounts of money to rent out and licence their data servers. On the other hand, Facebook built their own servers and incorporated innovative smart data into their systems in order to bring down prices and increase efficiency.

Design: Scrap-booking versus Consistency

MySpace Profile Page

As Sean Percival noted, one of the things that separated Myspace from the rest of the social media startups was the ability to customize their profiles with some very basic HTML & CSS code. As a result Myspace turned into an online scrap-booking medium full of wild colors and vibrant graphics, (mostly horrendous eyesores). Facebook, in contrast, can be compared to the first successful car-maker Ford and its Model T, as is mentioned in Convince and Convert’s article:” 6 Lessons Learned From the Demise of MySpace” by marketing titan Jay Baer. Henry Ford asserted that, “you can get this car in any color, as long as it’s black”. Likewise Facebook allowed minimal customization which created a certain feeling of legitimacy that Myspace certainly lacked. Another point mentioned by Jay Baer’s article is about profile names. On Myspace you had the ability to forgo your own name for a “cool” nickname. Indeed during the it’s reign they let users have their own online pseudonym, which is now accepted as nothing short of creepy. Facebook made it known from the start that only real names would be accepted, and did an excellent job of policing and removing profiles with fake names. Other successful tech companies like Twitter have successfully followed suit. 


Focus Focus Focus

Myspace Pages

Instead of focusing on their core platform and fixing the issues it had, Myspace just kept adding “junk” to their portfolio of associated pages. These pages that Myspace created, in order to capitalize on various segments of the marker, included: Myspace movies, comedy, books, etc. Again Sean Percival emphasized how instead of wasting time, effort and resources on these mediocre pages they should have focused on what made Myspace great, which was music.  But instead, the engineers working behind the scenes were spread out thinly. Rather than directing their efforts at perfecting their main platform, they were creating branches of the clunky platform in order to earn the company a quick couple million dollars. Something that current leaders of the tech sector, such as Google, have proven proficient at is knowing when to “kill off their babies”, as Percival described; specifically side projects that fail to gain traction. Such examples include Google’s notorious attempt at creating a social network, “Google +”. They of course did away with it as soon as they realized it had been a failure. 


What did Myspace do well? Music

Myspace Music

Anyone on Myspace in those days, during the late 90s and early 2000s, will know that Myspace became a platform for new artists to start, build an audience and distribute their music. Such big names like Avicii, Adele and Arctic Monkeys started their path to stardom with their Myspace profiles. Percival claims that this is the area that Myspace should have focused on, as it was later recognized as the “one thing that people liked about Myspace”.  When asked “what’s the one thing you would have done differently” Percival emphasizes that Myspace should have channeled their focus on the area of music and should have even bought Spotify when they had the chance. Indeed, at the time they were the only site where you could legally stream music, emphasis on “legally”. 

Overconfidence and corporate greed.

Myspace had a monopoly, therefore they also had the idea that they were too big to fail. In fact they were the number 3 most used website in the world for a long time. As a result of this, the leaders at Myspace failed to be innovative, pushing against new technologies and refusing to change with the times. And the times were changing, people’s online habits were changing. And yet Myspace refused to adapt, and suffered as a result. Mobile apps were one of the areas in which Myspace dragged its feet, particularly when it came to creating their own app. Their app was launched over a year after Facebook had done it. Facebook realized what Myspace hadn’t, at the time, that mobile apps were a powerful tool to adopt and keep new and returning customers. As a result of this greed and lack of innovation Myspace started losing its best people. These valuable employees started leaving in droves to work at other more innovative startups. 

Engagement and usability problems.

Facebook led the way in fostering engagement and usability when it introduced the “share” “like” and “comment” buttons. People loved these features, which drove engagement like Myspace had never been able to achieve before. As VP, Percival tried his hardest to get a like button on Myspace posts. Aggravatingly, it took them over 6 months to accept and incorporate the like button. Later, when they saw their competitors’ success, they realized that likes and comments were very powerful distribution channels. By then it was too late and they just found themselves copying Facebook instead of creating their own engagement tools. 


Final take: The raw data

Myspace versus Facebook Growth

In august 2005 both platforms were battling it out for user acquisition. In terms of raw data it stood at 20 million and about 9 million unique monthly visitors for Myspace and Facebook, respectively. Myspace’s visitor numbers later peaked in November 2005 at about 79 million users compared to Facebook’s 48 million. The eventual head-on collision and then reversal in market share domination occurred in May 2009 and thereafter at a rate of about 70 Million unique monthly visitors. The rest is history, as everyone knows. Now Facebook dominates as the second most visited website in the world* and it sits at the very top of the list as the world’s single most downloaded app **. Some would be amused to know that Myspace is even still alive! Under the proprietorship of Rupert Murdoch’s empire Myspace had 50 million monthly visitors in 2015. 

Startup Process


Summary Of what went wrong:

  • Poor Infrastructure
  • Lack of focus
  • Corporate Greed
  • Failed to change & adapt


Do you think Facebook will fail? Answer in the comment box below!



Additional reading:

  • Convince & Convert

  • The Harvard Business Review

  • Financial Times

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