TELECOM Digest OnLine - Sorted: For MySpace, Making Friends Was Easy; Big Profit Is Tougher

For MySpace, Making Friends Was Easy; Big Profit Is Tougher

Monty Solomon (
Sun, 23 Apr 2006 21:51:25 -0400

The New York Times
April 23, 2006


ALMOST on a lark, Chris DeWolfe bought the Internet address in 2002, figuring that it might be useful someday. At
first, he used the site to peddle a motorized contraption, made in
China and called an E-scooter, for $99.

Selling products online comes naturally to him. Having jumped into the
Internet business in the early days, Mr. DeWolfe had become a master
of the aggressive forms of online marketing, including e-mail messages
and pop-up advertising. After the Internet bubble burst, he even built
a site that let people download computer cursors in the form of waving
flags; the trick was that they also downloaded software that would
monitor their Internet movements and show them pop-up ads.

Very quickly, however, Mr. DeWolfe's tactics for MySpace changed. He
had noticed the popularity of Friendster, a rapidly growing Web site
that let people communicate with their friends and meet the friends
of their friends. What would happen, he wondered, if he combined this
type of social networking with the sort of personal expression
enabled by other sites for creating Web pages or online journals?

He convinced the executives of eUniverse, the company that had bought
his own marketing firm, ResponseBase, to back his plan. As soon as the
site was reintroduced, in the summer of 2003, Mr. DeWolfe saw it grow
quickly with little marketing. And although his scrappy backer was
hungry for cash, he resisted pressure to flood MySpace with
advertising and to turn all of its members into money.

"Chris came from ResponseBase, and they knew all the direct marketing
tactics to get money out of almost anything," said Brett C. Brewer,
the former president of eUniverse, which was later renamed Intermix
Media. "But I give him credit: from literally the first or second
month, he realized MySpace could be something we really need to
protect because user confidence in the site was paramount."

Now MySpace has a new owner -- Rupert Murdoch's News Corporation,
which bought MySpace and Intermix last year for $649 million -- and
the pressure on Mr. DeWolfe to find a way to make much more money from
MySpace is far greater.

But the opportunity is greater, too. More than 70 million members have
signed up -- more than twice as many as MySpace had when Mr. Murdoch
agreed to buy it -- drawn by a simple format that lets users build
their own profile pages and link to the pages of their friends. It
has tapped into three passions of young people: expressing themselves,
interacting with friends and consuming popular culture.

MySpace now displays more pages each month than any other Web site
except Yahoo. More pages, of course, means more room for ads. And, in
theory, those ads can be narrowly focused on each member's personal
passions, which they conveniently display on their profiles. As an
added bonus for advertisers, the music, photos and video clips that
members place on their profiles constitutes a real-time barometer of
what is hot.

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