In early 2005, Zuckerberg hoped MySpace would buy Facebook for $75 million.
Why did MySpace lose to Facebook?
Source: ID: Luanbooks
The founder of the product is not necessarily the final winner.
For example, in the field of SNS in 2003-08, Friendster was the originator of social networks, but was quickly taken down by MySpace, a new challenger. When MySpace topped the list in 2008, capital and users thought Facebook was the future.
Pull the time back to the other side of the ocean at the end of 2005. MySpace is just like the sun in the sky. Facebook is still growing in a low-key way on campus. Why did form begin to change in just a year? Young people are beginning to cheer for Facebook, and MySpace, though still powerful, seems to have sunset in the minds of users.
This article tries to answer two questions: How did MySpace get to the throne of social networking? Why did MySpace lose to Facebook?
The Rise of MySpace
Figure: The most striking way to register for Myspace is through the Facebook option.
As soon as Friendster.com was launched in March 2003, it grew to 4 million registered users in just a few months. It was said that one in three people in Silicon Valley was using Friendster at that time.
MySpace founders DeWolfe and Anderson have had many twists and turns in their lives.
Anderson is a genius full of Hippie style. He dropped out of high school and mixed up with hackers and rock circles. When he was 24 years old, he decided to go back to school and was admitted to the University of California, Berkeley. He majored in English and rhetoric. After graduating from college, he joined a rock band and once ran pornographic websites.
In the summer of 2000, Anderson joined Wolf, the Sales Department of SkyDrive company XDrive, where Wolf was the boss of the sales department. However, the Internet sales department was cut off and the whole sales department was cut off. The unemployed de wolf took Anderson and some former colleagues to set up ResponseBase in Losangeles's seaside town St. Monica.
Figure: DeWolfe and Anderson
After visiting China in 2002, Anderson discovered opportunities for small commodities in China and began selling toy models, children's scooters and cameras on e-mail.
Figure: ResponseBase website page
In September 2002, eUniverse acquired RespseBase of DeWolfe and Anderson for $3.3 million in cash plus $3 million in performance commitments.
In the summer of 2003, ResponseBase's performance declined sharply, and DeWolfe and Anderson racked their brains to keep the multi-million dollar performance promise they agreed upon when they were acquired.
They noticed the popular Friendster, on which users can create their own personal homepage, upload photos, introduce their interests and hobbies, invite friends to become friends, and harvest millions of users in a few months.
Figure: Friendster page
However, Friendster has trampled many holes in its development process. Firstly, the website requires users to adopt real-name system, and then uses a complex algorithm to evaluate the degree of strangeness among users. Users are prohibited from making friends with people whose strangeness exceeds four levels (the popular theory of six-degree networking at that time), that is to say, they can only contact four-degree networking at most.
In this process, it takes nearly 20 seconds for a user to log in at a time, and very few users have the patience to wait.
MySpace has a chance.
On August 15, 2003, MySpace went online. The first version of Friendster was replicated at the pixel level. DeWolfe used their mature e-mail system to promote MySpace. Then MySpace began a very rapid iteration: a week later, it abandoned the practice of assessing users'strangeness and turned to a very clever method: setting Anderson as a friend of all. In this way, everyone has a second-degree relationship in the network.
Especially compared with Friendster's 20 seconds load time, MySpace can achieve less than 2 seconds, greatly improving the user experience.
The second highlight is on a Bug in MySpace. One month after the website went online, CTO Zhou De left his job and his operation was paralyzed. What's worse, the programming language of the website was Perl. No second person in the company would use it. In an emergency, DeWolfe called in two of the company's programmers to redevelop the site in ColdFusion.
In the process, the two people made a mistake: users can insert HTML markup language into the web page freely, so they can add color wallpaper and background freely to their home page.
Figure: MySpace's Web Editor Tool
This Bug is popular with teenagers immediately after it goes online. For a while, users flock to edit their own websites, and even a third-party plug-in assists users in editing websites. MySpace has decided to retain this feature.
Early MySpace was fierce and iterated very quickly, from music playing to photo scoring to group functionality. Compared with Friendster's unchanged experience, users voted with their feet to MySpace.
The Rise of Facebook
MySpace has only been online for six months, surpassing Friendster and becoming the world's largest social networking site.
At the same time that MySpace overtook Friendster, Facebook went online in Harvard dormitories in February 2004.
Compared with the hippie background of MySpace's founder, Koiza's Facebook, born in Harvard's elite background, is born with an elite model that restricts schools from registering through school mailboxes, unifying pages and forbidding users to change page styles themselves.
Figure: Facebook and MySpace interface 2004
The difference of founder's background makes the user groups and promotion methods of the two products very different.
In the early days of MySpace, two founders visited nightclubs to invite musicians, models and singers to set up homepages on MySpace, attracting many beautiful girls (and pornographers) to join the community. Music, rock, pornography and hippie style became the core atmosphere of the early community.
Picture: MySpace 17 Night Club Tour Party, June 2004
The top six schools on Facebook are Harvard University, Columbia University, Stanford University, Yale University, Dartmouth College and Cornell University. Also hormonal, Facebook has built a more trendy and sophisticated brand tone among young people: this is where Harvard students pick up girls.
Figure: Facebook's Early Registration Interface: This is where Harvard University picks up girls
The impact of this difference slowly emerged a few years later, but MySpace never looked at Facebook at that time.
When MySpace reached 17.7 million users in June 2005, Facebook had fewer than 3 million users.
Zuckerberg also went to talk to DeWolfe in early 2005 to sell Facebook to MySpace, where he had a $75 million price tag. He hoped MySpace would buy Facebook for $75 million.
But MySpace refused. The reality, of course, was that DeWolfe couldn't afford to pay at all, and MySpace itself didn't sell for more than $75 million in the market at that time.
At that time, Myspace had a very tense relationship with its parent company, Intermix (renamed eUniverse), and DeWolf couldn't approve the $5,000 application for purchasing cultural shirts from the parent company.
MySpace was in a very dangerous situation at this time. The demand for devices on the website began to lag behind the growth rate of users, and the speed of users'login began to slow down.
To solve this problem, MySpace finally negotiated with its parent company to accept external financing, and soon acquired a red-spot investment of $11.5 million, valued at $46 million.
Figure: Facebook and MySpace 2005
In 2004, media tycoon Murdoch began to regain interest in the Internet. In the 99 year of the Internet bubble, YAHOO created two times the market value of news group with less than 3% of news group's revenue. Murdoch began to invest in the Internet crazily and spent about one billion dollars to acquire websites such as WebMD, Juno.com, TheStreet.com and SixDegress.com. However, in July 00, the Internet bubble burst, and Murdoch suffered serious losses. Almost all investments were fought. Desperate Murdoch disbanded the network department and led the company into satellite television.
At the end of 2004, Murdoch, who completed the satellite TV layout, saw that News Corp. did not grow, and a report from PricewaterhouseCoopers spurred him to:
In 2004, the overall revenue of the online advertising business reached 9.6 billion US dollars, an increase of 33% over the same period last year, with an astonishing increase.
Murdoch, who has restarted his Internet layout, has listed a number of acquisition targets, with MySpace's parent company Intermix the top priority.
On July 18, 2005, News Corp. completed its Intermix acquisition, with a consideration of $580 million, plus options and wages at a real price close to $750 million.
News Corp. got tickets to the Internet as it wished.
Ironically, however, neither DeWolfe nor Anderson actually participated in the negotiation of the transaction, and Intermix sold its company without their knowledge. Of course, it's also possible that they're satisfied with the reward: MySpace's founder received $75 million in salary in two years. Faced with that amount, DeWolfe, who wanted to lead MySpace to an independent listing, chose to remain silent.
The Zuckerberg team was heartened by MySpace's acquisition, when Facebook, with only one fifth of its users, had just financed a $100 million valuation.
Xiao Zha is a prophecy.
After being acquired, MySpace quickly reached its peak and then slid to the bottom like an out-of-control roller coaster.
MySpace did not launch a perfect advertising system, but customized development pages for customers, resulting in a very low speed of development and standardization.
Figure: Myspace's business pages are customized
MySpace is also extremely unfriendly to developers on the platform. Because MySpace can set its own web page function, there are many websites providing web page design services on the market, the largest of which are Slide and RockYou. The number of users of the two MySpace-based websites reaches 117 million and 82 million respectively. However, they have never received any comments from MySpace. The founders of Slide have only seen one side of MySpace's managers, let alone the founders. 。 Slide and Rock You have never earned a penny from MySpace, and any third-party plug-ins that might divert advertising revenue are taken seriously by MySpace officials.
Figure: Web editing software at that time
The location of the company can also explain some of the technical problems. After MySpace was acquired, it moved to Beverly Hills, near Hollywood. There were many movie stars but few engineers, far from the heart of Silicon Valley, could recruit good engineers.
Figure: MySpace and Facebook office locations
Finally, the liquidity pressure of News Corp. In the 00 year, news group, which was feared by the Internet bubble pit, set a very high liquidity goal for MySpace at the very beginning. Murdoch demanded that 1 billion dollars be earned before June 08. This is a challenging goal. It took five years for Google to achieve this goal, eight years for Yahoo, and only three and a half years for MySpace to be established.
In August 2006, MySpace reached a $3.9 billion advertising framework agreement with Google, which will provide search services as well as advertising for MySpace. After the announcement of the deal, News Corp. shares soared to a record high. Murdoch finally proved the correctness of his acquisition of Internet assets, but at the same time undermined the platform's user experience and ability to sustain investment.
MySpace can be said to have gone through all the pits for Facebook:
The acquisition of MySpace has made the market realize the value of social networking, and Facebook has a reasonable benchmark in the market, which is very beneficial for financing.
In 2006, after MySpace got Google's advertising bills, Facebook quickly got them from Microsoft, doubling its revenue that year.
Seeing the aftermath of MySpace's acquisition, Xiaozha refused Yahoo's $1 billion offer to operate independently.
Facebook launched a self-service advertising system because MySpace's advertising system had a poor experience.
MySpace treats tripartite developers poorly, and Facebook launches a developer platform for developers to use for themselves.
MySpace paid a good tuition fee for Facebook.
Facebook won battles, but the decisive factor in the war was its new feature, Newsfeed, launched in 2006.
A decisive victory in war
In June 2004, the summer vacation of American universities was just beginning. Facebook, which had been on line for four months, entered a period of steady traffic. Zuckerberg and his team were rushing to strengthen their website construction before the autumn semester. Xiaoza made a very important decision: to go to Silicon Valley to work.
Figure: Zuckerberg and De Angelo
De Angelo and Xiaozha both attended Ester High School, where they won the eighth place in the American Computer Olympics and the silver medal in the International Olympic Competition in Informatics. They are top programmers.
Xiao Za and De Angelo built a music player Synapse in high school. Although they went to college in California on the east coast and Harvard on the West coast, they were still working together to maintain the player.
Figure: (left) Synapse interface (upper right) Synapse installation interface (lower right) Readme
When running Synapse Music Player, the idea of customizing personalized recommendations for users began to take shape. On May 14, 2003, Xiaozha and De Angelo, who are still freshmen, filed a patent application: The Method of Identifying Information Unit Patterns and Generating Information Flow. Based on their experience in operating music players, they proposed a method to calculate users'preferences and tendencies based on users' historical broadcast data, and then customize a media stream for them.
Figure: Technological Implementation Model in Zuckerberg's and De Angelo's First Patents
Does it sound like Netease Cloud music? However, the technical implementation method proposed by two people in the patent is quite low. The recommendation method is more like patting the head. The form of product implementation can be understood as how to achieve random play in the existing music library of the player.
Figure: Stream is mentioned in Xiaoza and De Angelo's first patent
Twitter's online presence represents a new form of information distribution beyond portals and search: information flow, which is no longer limited to editors'recommendations and users' active search, but through the aggregator of information flow, presents endless information based on social and subscription relationships to you.
Ben Thompson, a well-known technology blogger, commented on information flow as follows: User socialization and information acquisition should be combined with one scene after another, such as socializing with classmates in school, socializing with neighbors in the community.. However, after the emergence of information flow platform, all scenarios are aggregated, and as an aggregator, people, information and scenarios are integrated. Passive information infusion also satisfies people. Our inertia.
Figure: Ben Thompson's understanding of information flow
Since July 2006, Facebook has applied for a number of patents for the upcoming information stream Newsfeed intensively. The implementation of Newsfeed is described in detail in the patents.
In terms of specific sorting methods, it is said that De Angelo set an index by patting his head: the weight of text information is 1, and the weight of picture information is 5.
Figure: Implementation model of NewsFeed in Facebook patent
Figure: Newsfeed Patents
Just as Oppenheimer completed the development of the atomic bomb, the war could be declared over.
Even though MySpace still has twice as much traffic as Facebook, Facebook has won in everyone's minds.
On August 8, 2007, News Corp. announced that Myspace was well-managed, with sales of $550 million and profits of $10 million for the first time. Murdoch predicted that sales would exceed $1 billion next year at a conference call with many analysts. Within a week, however, News Corp. shares fell to their lowest level in the year.
In May 2008, Facebook surpassed MySpace in global independent access, and in the next year, the United States surpassed MySpace in access. MySpace began to plunge into a new management battle, with DeWolfe and Anderson out and Facebook CEO Van Tana taking over as CEO.
Figure: User data for Facebook and MySpace
In June 2011, MySpace was sold to Specific Media Group and Justin Timberlake, the actor of Sean Parker in the movie Social Network for $35 million.
In May 2012, Facebook went public on Nasdaq, the largest IPO ever, with a market capitalization of $115.2 billion. The media's name for Zuckerberg, a young man in his twenties, is astonishingly unified: the king.
Young users who grew up in the age of mobile Internet no longer remember MySpace.
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