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Background and Central Problem Myspace. com is a SNS (social networking service) website which was founded in 2003. It was once the most visited social networking site in the world, and in June 2006 surpassed Google as the most visited website in the United States. It has been operating well with all its good features of music, games, videos and pop culture until early in 2008, when it was overtaken by Facebook in the number of unique worldwide visitors, and was surpassed in the number of unique U. S. visitors in May 2009.

It had a significant influence in pop culture and music and created a gaming platform. Also, the site started the trend of creating unique URLS for companies and artists. With its once excellent performance and fame, Rupert Murdoch loved it very much, which led to the fact that Myspace was acquired by News Corporation in July 2005 for $580 million. However, since then with the poor managing strategies, wrong market positioning and News Corporation’s little help, the number of Myspace users has declined steadily in spite of several redesigns.

After failure of changing top management for several times and leaving of its founders, Myspace was Jointly purchased by Specific Media Group and Justin Timberlake for approximately $35 illion in June 2011. After Myspace’s peak time, its poor performance in innovation and management strategies make it generally being considered as a pornographic site. Too heavily it depends on advertisement without proper screening. It represents a negative, chaotic and obsolete environment to the public. Moreover, after being acquired by News Corporation, it got little autonomy and enough help.

To make things worse, too frequent changing of senior management, among whom no one really knows about Myspace, has generally diminished morale within the company. Myspace has fallen into a vicious circle and exodus of users continues. Environmental Scan Demographic The number of users is crucial for a SNS company. Because social networks appear to be a very peculiar business, in which companies might serially rise, fall, and disappear. Thus to remain high popularity and good reputation have a direct correlation to its revenue. As an early pioneer of SNS business, Myspace used to be a leading company in this area.

According to the statistics of ComScore, when Murdoch purchased Myspace and its parent company, Intermix, in July 2005, Myspace already had around 20 million monthly unique visitors, comparing to the number of Facebook hich is less than its half volume. After the acquisition, the number of Myspace users continued to increase, and at its December 2008 peak, Myspace attracted 75. 9 million monthly unique visitors in the U. S. , according to ComScore. But in April 2006, the Facebook users surpassed Myspace users. Then the users of Myspace kept declining. Until April 2011, the unique users Myspace in U. S. were approximately 37. million, The number of celebrity users is also important for a SNS company. Strong celebrity charm would attract people to Join the network, which has a constantly good effect on he business. Myspace used to have a lot of celebrity users, however, many of them moved to Facebook afterwards, which led to exodus of its normal users. Socio-cultural Users are likely to see a clean interface, not like Myspace, which is full of advertisement and pornography. Myspace’s promise to redefine music, politics, dating and pop culture used to attract many young people, especially some teenagers, to Join into the community.

However, under the pressure of demanding revenue from advertisement, many Myspace pages appear to be host bodies for the worst kinds of advertising parasites. It has been an eyesore for users. Economic conditions While developers at Facebook, Tumblr, and Twitter, startups backed by venture capital, were more free to design their products without the immediate pressure of advertising goals, Myspace managers had to hit quarterly revenue targets. News Corporation considered Myspace as a money-making machine, rather than one of its core businesses to develop.

The contract with Google in 2006 gave a greater pressure to drive revenue on Myspace. As DeWolfe once said, the imperative to monetize the site stunted its evolution. Legal Myspace has had to deal with several legal issues, which had negative effect on its reputation. As an open social network platform, Myspace provides people chances to know with each other, sometimes even face to face. In 2007, a lawsuit filed against the website alleged, a 15 year old Houston-area girl met an adult predator who drugged and raped her, and initially they knew each other on Myspace.

In February 2006, Connecticut Attorney General Richard Blumenthal announced that he was launching an investigation into minors’ exposure to pornography on Myspace. And hen attorneys general from around the country were launching investigations into Myspace’s safety as well. All of these increased fears among public that this popular social networking website may have become places where sexual predators easily prey on children. Moreover, after Myspace failed in the lawsuit of music copyright in April 2008, it had to spend a large amount of money to set up Myspace music with some record companies.

Technology When Myspace was founded, it had developed its unique and wonderful features, such as its media player, music playlist, video player, etc. Basically, it developed verything it thought to be needed itself. However, mismanagement, a flawed merger, and countless strategic blunders along with its arrogance seeing hundreds of millions of people around the world are living on the platform, have stunted its that allowed outside developers to build new application, Myspace did everything itself. But it went too wide and not deep enough in its product development.

A lot of its products were shallow and not the best products in the world. The development cycle turned into one of crisis management, not one of innovation. Competition The competition within this business is cruel. A group of new, specialized social media companies are strong and tough competitors of Myspace, such as Tumblr, Twitter and Facebook. These companies were once quite less strong than Myspace. But, through constantly providing good user experience and innovation when Myspace encountered serious problems, these companies grew enormously.