MySpace is a social networking site created in 2003. It was founded by employees of eUniverse, an internet marketing company. Chris DeWolfe, Brad Greenspan, Tom Anderson and Josh Berman worked on the project after realizing the huge potential of Friendster. Ten days later, the first version of MySpace was ready for launch. DeWolfe became the first CEO and Anderson the first president of MySpace.
The first users of MySpace were employees of eUniverse. To encourage everyone to invite as many friends as possible, the company held contests to determine who could sign up the most number of users.
It didn’t hurt that eUniverse had e-mail subscribers amounting to 20 million. The user base steadily grew in number, and in January 2004, MySpace was officially launched to the public. Within one month, the social networking site already had 1 million registered users.
In November 2004, just 11 months after launching, MySpace boasted 5 million unique users. Every new user was automatically friends with Tom Anderson, co-founder and president of the company.
At this point, everybody could see that MySpace was the next big thing. Viacom was set to acquire the company, but News Corp entered the fray and surprised everyone by purchasing Intermix Media, the parent company of MySpace, for $580 million. According to estimates, the value of MySpace in the deal was $327 million.
Since the acquisition, MySpace enjoyed a few years of success. In July 2006, MySpace became the most visited site in the United States, beating other giants such as Google Search and Yahoo! Mail. A staggering 80% of all social network traffic came from MySpace. It was clear that News Corp bought the site at an incredible bargain.
Other social networking sites were sprouting in all directions, with one posing a serious threat to claim the throne away from MySpace: Facebook. In late 2007, Facebook was quickly gaining a ton of users. Facebook matched the 115 million unique users of MySpace by April 2008, although the latter was still the clear winner in terms of US traffic. In December 2008, MySpace reached its peak with 75.9 million unique users in the United States.
In April 2009, DeWolfe announced that he would be stepping down as the company’s CEO. MySpace was losing users at this point, although it remained the largest social networking site in the US. Everything went downhill from there. The huge $900 million three-year deal with Google was partly to blame for MySpace’s rapid decline.
Upon entering that deal, MySpace was forced to double the ads on their pages, which made it difficult to implement new features and caused the site to have slow loading times.
All this happened while Facebook and other social media sites focused on creating a more simple design and implementing features that improved the social experience.
Rupert Murdoch, Chairman and CEO of News Corp, became frustrated with MySpace after failing to meet expectations.
On June 29, 2011, Specific Media bought MySpace for $35 million, just 6% of what Murdoch paid for it six years ago. As of September 2015, MySpace ranked 1,912th by total web traffic and 1,643rd in the US according to Alexa.