5 lessons every business should learn from MySpace's spectacular collapse.

This week's must-read for all digital professionals is Bloomberg Businessweek's exhaustive and fascinating look back on the collapse of MySpace.

While it's compelling as a singular case study, "The Rise and Inglorious Fall of Myspace" also offers many hard-learned lessons for any business trying to build a strong future online.

Here are five takeaways that jumped out at me, followed by the relevant excerpts from the article:

1. Don't let good traffic numbers cloud your ability to spot serious structural problems.

The troubles at Myspace hardly went unnoticed by its corporate owners. But the site's continued success muted any alarms that the social media network was on an unstable path. "When you're growing at 300,000 users a day," says (former head of MySpace marketing and content Sean) Gold, "it's hard to imagine that you're doing anything wrong."

2. Don’t try to do it all in-house.

While Facebook focused on creating a robust platform that allowed outside developers to build new applications, Myspace did everything itself. "We tried to create every feature in the world and said, 'O.K., we can do it, why should we let a third party do it?'" says (MySpace co-founder Chris) DeWolfe. "We should have picked 5 to 10 key features that we totally focused on and let other people innovate on everything else."

3. Be careful what you build on.

Part of the reason Myspace struggled to keep up with emerging technology companies was its site architecture. DeWolfe says that when he and Anderson conceived of Myspace, speed to market was essential. Friendster knockoffs were popping up everywhere. Myspace's founders decided to build the site using ColdFusion, a simplistic programming language. "ColdFusion, even back then, in the engineering world, was thought to be a sort of Mickey Mouse type of technology," says DeWolfe. "But it was so easy to use that we could just crank it out quickly. We blew out Friendster. We blew out Tribe.net. We blew out everyone."

They also created what DeWolfe calls "technology debt." By 2005 the site had outgrown ColdFusion. At that point it was too late to switch over to the open-source-code software favored by developers; changing would have delayed the site for a year or two just as it was exploding in popularity. The easiest move, says DeWolfe, was to switch to .NET, a software framework created by Microsoft.

"Using .NET is like Fred Flintstone building a database," says David Siminoff, whose company owns the dating website JDate, which struggled with a similar platform issue. "The flexibility is minimal. It is hated by the developer community."

4. Don’t let short-term greed lead you into making poor long-term revenue decisions.

Part of his challenge, DeWolfe says, was the pressure to monetize the site. 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.

That pressure increased dramatically in the summer of 2006, when Google paid $300 million a year for three years to be the exclusive search-engine provider on Myspace on the condition that the social network hit a series of escalating traffic numbers. In retrospect, DeWolfe says, the imperative to monetize the site stunted its evolution: "When we did the Google deal, we basically doubled the ads on our site," making it more cluttered. The size, quality, and placement of ads became another source of tension with News Corp., according to DeWolfe and another executive.

"Remember the rotten teeth ad?" DeWolfe says. "And the weight-loss ads that would show a stomach bulging over a pair of pants?"

5. When it comes to features , don’t sacrifice quality for quantity.

Another recurring problem is that there was not enough of a culture at Myspace of testing, measuring, and iterating. New products were often buggy, making the site slow and difficult to navigate. "Myspace went too wide and not deep enough in its product development," Gold says. "We went with a lot of products that were shallow and not the best products in the world."

This final point is one that Facebook should spend a good long time considering. Over the past year, Facebook has launched a flurry of new features, often with little motivation beyond keeping pace with offerings from competitors like Groupon and Foursquare. But while these services continue to evolve their core products, Facebook spreads itself increasingly thin and offers relatively little support or improvement after launching additions.

Facebook has clearly built itself on a far more sturdy foundation than MySpace, but the revelations of this week's article show that it's not one sudden blow that crumbles a monolith; it's the failure to spot all the little stress fractures that form along the way.

David Griner is the Director of Digital Content for Luckie and Company and contributing editor for Adweek’s blog, AdFreak.com. You can reach him by e-mail or on Twitter.

Photo credit: Mookie on Flickr.

 

Comments

[TWood]

I remember telling my kids and their friends when Fox News bought MySpace. They were horrified. That association alone is enough to kill any site that is built for the young.