MySpace to Reinvent Web 2.0?

News Corporation’s COO Peter Chernin told investors at the Merrill Lynch Media & Entertainment Conference that MySpace could move to develop its own applic­a­tions to rival or dominate other Web 2.0 services:

“If you look at vir­tu­ally any Web 2.0 applic­a­tion, whether its YouTube, whether it’s Flickr, whether it’s Photobucket or any of the next-​​generation Web applic­a­tions, almost all of them are really driven off the back of MySpace … There’s no reason why we can’t build a parallel business … Given that most of their traffic comes from us, if we build adequate, if not superior, com­pet­itors, I think we ought to be able to match them, if not exceed them”

It may be naive, but I can see two issues with this strategy.

(a) Part of the appeal of MySpace is to be able to plug-​​in bits of media — movies, pictures and music — from other web services. “One of its most popular attrib­utes,” according to Pete Cashmore. Removing this ability could increase the appeal of com­pet­itors like Facebook which has opened its API to third party developers and is soon to open its doors to non-​​academic members.

The claim that other Web 2.0 services are ‘driven’ by MySpace runs both ways, I think. Isn’t MySpace’s success partly driven by the avail­ab­ility of all these other services?

(b) Doesn’t MySpace save money and increase its profits by having other pro­viders host and serve videos/​pictures/​music that are then placed on its members’ pages? YouTube, for example, is rumoured to be paying $1mn a month in band­width costs. Take into account that MySpace is expected to make just $350mn in revenues this year and only just prof­it­able at that level. Result of running own video service = serious loss.

via Techcrunch, News Multichannel

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