It all seemed so promising when Rupert Murdoch beat out Viacom rival Sumner Redstone for the acquisition prize of Myspace in July 2005 and was treated like a rock star at San Francisco’s Web 2.0 conference in the fall of 2007. But that same latter year, per Adegoke’s interviews with executives who worked at both News Corp. and Myspace, two paramount mistakes were made:
Murdoch brazenly predicted that Myspace would generate up to a $1 billion in revenue in the next fiscal year. The forecast caused panic at Myspace, according to the two former executives. “It was a big blunder to say that to the Street,” said the first executive. “When you looked at how Myspace’s numbers had been trending it was possible–but it was a stretch.”
“After that moment it was basically like all the tentacles of News Corp. got involved in a bid to make that target, so getting anything done became near impossible.”
The other major error in Murdoch’s social network judgment was to continually underestimate Facebook. Though he dismissed the rival at one point as a “communications utility,” Facebook’s ability to open itself up first to third-party developed applications such as Farmville in May 2007 was essentially the Myspace death blow. Four years later, Myspace is flatlining on the two most important web-life monitors: unique visitors and ad revenue.