At one time, MySpace and Digg were two of the hottest things smoking in the social media space. MySpace was the number one social network while dig reigned supreme as the top social bookmarking and news site. Nowadays, these brands are literally mere shells of their former selves. Rise and fall stories are often said for the fallen, but typically leave valuable lessons behind. In this article, we will discuss what businesses can lean from the demise of social giants MySpace and Digg.
It’s Not All About the Money
In 2005, MySpace ruled all social networks and was seemingly on top of the world. This was the same year News Corp. acquired the popular internet brand for a hefty $580 million. But while MySpace appeared to be poised to fly even higher following the acquisition, seven years later, it has been all but wiped off the map by Facebook. The service was purchased by Justin Timberlake and Specific Media Group in 2011 as part of a joint venture, but despite the rebranding efforts, the attempts to recapture the glory have largely been considered a failure.
MySpace looked unstoppable, but its demise shows that no powerhouse is invincible. It is obvious that failing in areas where Facebook succeeded had a lot to do with the reversal of roles, but perhaps greed played a big part as well. After entering a very lucrative advertising deal with Google back in 2006, MySpace was forced to double the amount of ads on the site, which helped create the cluttered experience that drove users away. The lesson – never put money over the user experience. Put the users first, and the big paydays will come.
A Viable Business Model Is a Must
The rise and fall of Digg may look very puzzling on the surface. After all, the service was incredibly popular with legions of loyal users to call its own. Less than a year ago, it was generating more traffic than any other social news site. That all changed last December when Reddit passed it and never looked back. It was all downhill from there. In early July, Digg was sold in three portions, with the main assets going to Betaworks for $500,000.
Digg’s failure has come as a shock to many. How could a service so popular, with such a large and loyal community crumble just like that? Unfortunately for Digg, it lacked the business model needed to survive. The lesson here for brands and entrepreneurs is the importance of creating a sustainable product or service that generates revenue. Digg obviously had a great idea, but with only so much money coming in, there was only so much it could do in terms of continually developing that idea to compete with the likes of Reddit and StumbleUpon.
As a market, social networking is about as unpredictable and fragile as they come. Seems unlikely now, but one day we could be discussing what led to the unfortunate fate of Facebook and Twitter.