Glam VS Geeks
Do you Facebook or MySpace? Increasingly, membership in one social network does not necessarily rule out the appeal of belonging to the other. Of course, each company wants you visit their site more often than the other (if not exclusively)—all the more reason to differentiate. To that end, MySpace, the 800-pound News Corp.—owned gorilla, made three major announcements this week—two of which served to underscore a deepening fundamental difference in philosophy from its closest rival, Facebook. "MySpace is Hollywood and Facebook is Silicon Valley," says David Card, a senior analyst for Jupiter Research. Or you could put it this way: MySpace is glam; Facebook is geek. Not that there's anything wrong with either.
MySpace announced Tuesday that it has forged a splashy licensing agreement with Sony BMG—the world's second largest label—for access to streaming videos, music and other content. The partnership calls for the social-networking giant and the music studio to share advertising revenue. And in a bid to conquer the social-networking world beyond U.S. borders, MySpace will soon be offering its 110 million active monthly users free voice chats via a new partnership with Skpe (220 million strong, mostly outside of the States). In a new service called MySpace IM with Skype, the Internet phone company will enhance the MySpace instant messaging service with new free VoIP capabilities starting November. (The companies will split the revenue, but specifics of the arrangement were not disclosed.)
These moves stand in direct contrast to Facebook, which instead of teaming with major media players to build services for its network of 47 million active users, allows third-party developers to build applications. A staggering 6,000 applications have been built for Facebook just this year. "We are not a media company," Mark Zuckerberg, the wunderkind brains behind Facebook, announced at the Web 2.0 Summit in San Francisco this week. Analysts are inclined to agree. "I think there's a core philosophical difference, but [it's] the same revenue engine at the end," says Jupiter's Card. That engine, of course, is advertising. But with its Skype and Sony BMG announcements, original programming and hosting concert tours, MySpace seems to be morphing into an entertainment portal where everyone is in your extended network (and a potential audience member).
Facebook, on the other hand, has tended to be more of a communications hub than its rival. Its platform infrastructure is built around connecting you to your actual friends—hence the viral appeal of applications like Scrabulous, Where I've Been and Top Friends. Oh, and it's even already possible to make calls on Skype through some Facebook apps. And, to be fair, the private company is a chic geek. It's a media darling despite having about half the active users of its chief rival. Its enviable flavor-of-the-month veneer is due in no small part to the cagey Zuckerberg, who has declined outlandish offers for his company in order to stay in control. He's also maintained a vigorous reluctance to publicly adopt anything as mundane as a business model. Meanwhile, Microsoft, Google and other funds have reportedly been in talks with the site, considering investments that industry-watchers say would put the value of Facebook at a hard-to-fathom $10 billion (MySpace has been estimated at least $16 billion).
This is where MySpace's third big announcement this week enters the picture. Perhaps in a bid to make inroads with the developer crowd that has become so loyal to Facebook, MySpace CEO Chris DeWolfe and News Corp. chairman Rupert Murdoch confirmed at the Web 2.0 Summit that the company is working on a developer platform of its own. Details were sketchy and the date of its launch likely farther off than "within a couple of months" as vaguely promised. Even Kyle Brinkman, vice president of product development of the social network, wavered slightly in his enthusiasm for third-party development. "I do think there's a place for widgets and add-on applications," he tells NEWSWEEK. "But where we see core propositions for our users, that's where we want to build services ourselves."
Which means MySpace is thinking like, well, an old media company. "They may be creating some big synergies for partnering and monetization, but I don't think it's really revolutionary thinking at all," says Rodney Rumford, a consultant and publisher of FaceReviews, a blog that tracks and critiques the network's applications. "Where Facebook has a great advantage in the long term is the ability not to serve me ads based on what page I happen to be on, but through my behavior. It knows what groups I'm in, it knows my behavior and it knows my friends." How they end up doing that remains to be seen. But as far as users are concerned, it increasingly seems to make sense to belong to both: one for your music fix and the other to keep tabs on your friends.