The Wall Street Journal-20080205-Business Technology- MySpace- Seeking Growth- Makes Way for Widgets- Social-Networking Site To Permit New Services By Outside Developers
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Business Technology: MySpace, Seeking Growth, Makes Way for Widgets; Social-Networking Site To Permit New Services By Outside Developers
Full Text (1057 words)MySpace.com may be America's most-trafficked Web site, but now it's playing catch-up.
As it tries to jump-start its slowing growth rate, the social- networking giant today will begin to let software developers build new services for its members. The new features, which will go live to users next month, will transform the site into a destination for a much wider range of potential activities like sharing travel plans, exchanging fashion advice and competing in multiplayer games.
Until now, MySpace, worried about overcommercializing the site and undermining users' privacy, had largely limited members to decorating their personal pages with photos, videos and other digital trinkets. But in recent months rival Facebook, which opened up its pages to outside developers last May, has seen its number of unique monthly U.S. visitors soar -- up 81% to 35 million in the 12 months to December, according to comScore Inc. Meanwhile, MySpace's U.S. growth rate slowed sharply, up only 13% to 69 million in the same period, after nearly doubling from December 2005 to December 2006. Still, in December, MySpace was the No. 1 Web site in the U.S. by page views, according to comScore.
Much of Facebook's surge is a response to its decision to open membership to all comers, after previously restricting it to students. But the site has also generated interest with its wider array of activities.
Once an offshoot of online dating, social networking has become a starting point for a variety of Internet behavior. The top sites want to remain indispensable to their users by pointing them to relevant content wherever it resides on the Web.
MySpace's loss of momentum has jolted the site's founders, Chris DeWolfe and Tom Anderson, and its owner, News Corp., which paid $580 million for the site in 2005. (News Corp. also owns Dow Jones & Co., which publishes The Wall Street Journal). MySpace had helped to pioneer the social-networking phenomenon. But in its desire to retain its vaunted identity, it resisted broadening the range of outside services it would offer to members. And even when the two founders -- who continued overseeing it after the sale to News Corp. -- decided to change their policy, the broad strokes of which they outlined in October, they vacillated for months about how to implement it.
MySpace is still the biggest property in the red-hot U.S. social- networking arena. It's still growing at a rate many companies would envy and has revenue that trumps its rivals. Executives at MySpace and Fox Interactive Media, MySpace's parent division within News Corp., say a slower growth rate is inevitable and deny the site's slowness to open itself up to developers affected its growth rate.
"We never took our eye off the development side," says Peter Levinsohn, president of Fox Interactive Media.
The 41-year-old Mr. DeWolfe says MySpace didn't rush a platform for developers out the door because it felt it already offered many of the features being built for other social-networking platforms. But he also acknowledges the company mishandled its relationship with developers and is "dedicated to improving it," he says.
A former Internet marketing executive, Mr. DeWolfe always saw MySpace as the "MTV of the Web," seeking to build a site that he thought was more creative and less generic than those erected by typical Silicon Valley companies.
But as he and Mr. Anderson raced ahead with their vision to become a global lifestyle brand, the duo neglected to focus on an issue that had been percolating since the Web site's launch: to what degree MySpace should be open to outside developers. Savvy MySpace users had long been cutting and pasting small badge-like features -- called "widgets" -- onto their pages. Some widgets offered slide shows; others horoscopes.
Despite appreciating the features, MySpace and Fox had rocky relationships with developers. They shut many off for violating their terms of use and gave others little attention, say developers. "We had some distractions in 2006 and we got more freedom back on the development side in 2007," says Mr. Levinsohn.
Mr. DeWolfe says MySpace prioritized its development projects based on what it thought best for its users.
Facebook raced ahead. Last May, the company announced that it would allow third-party developers to build a new generation of social- networking applications for its members. The closely held Palo Alto, Calif., start-up hoped the steps would give its users more to do on the site and raise its profile.
Whereas MySpace had allowed users to dress up their profiles with slide shows and polls, Facebook users were now able to do things like lend each other money and compete in multiperson games with friends they had added through the site. "MySpace has to respond," said Max Levchin, chief executive of Slide Inc., a San Francisco start-up that builds widgets for Web sites like MySpace and has created some of Facebook's most-popular applications. "They have to compete."
Mr. DeWolfe shrugged off Facebook's move. "It didn't really have an impact [on us]," he says. But others started to worry. "Having somebody bang on your door and start to say we can do something similar, even a little better, really is a bit of a wake-up call," concedes Amit Kapur, MySpace's chief operating officer.
Executives considered multiple plans, among them partnering with a group within Fox Interactive Media that designed widgets for brands and companies as well as designing their own technology from scratch.
But within weeks MySpace changed its mind, focusing on adopting a more open standard by partnering with Google Inc. The search juggernaut had decided to develop new technology that opened up core features of social networks to developers for free. Google hoped to share the tools with the rest of the industry, including MySpace.
Even then, MySpace debated whether to join Google's venture, worried about the security of the technology and giving up control, according to people familiar with the matter. It announced its partnership in November and today plans to unveil more details about how technologies will be integrated along with its decision to allow developers to keep all revenue from advertising permitted to run on a part of their applications.
Jia Shen, co-founder of RockYou, a popular maker of widgets on the Web, says he has found MySpace's outreach promising. "[But] the longer the wait, the more work they have to make up for," he says.
