MySpace CEO Mike Jones swears that, buried under the rubble of the failed social network he gamely took over last year, he and his team have planted the roots of a new, perhaps smaller, MySpace that is already growing into a popular product.
Of course, Jones has to believe this.
For one: how else could he stay sane, doing his job?
For another: News Corp (with the help of Allen & Company) is trying to sell or spinout some of MySpace, and it’s easier to sell even a small online product, if it’s growing, than it is to sell huge, decaying one.
Just think about it in terms of valuation multiples. A growing site will get a 6X to 10X revenue multiple. A stagnant or shrinking site will get 1X.
So what is this MySpace that Jones believes in?
It is not a Facebook competitor. In fact, the MySpace product Jones is working on might best be compared to Tumblr – or even Huffington Post.
In an extensive, exclusive interview, which we’ve shared below, Jones calls it “social entertainment.”
“When people come to MySpace, we want them to connect with their favourite topics, their favourite bands, their favourite celebrities.”
“We want to create an entertainment stream that’s personalised with up to date content on topics [users] love.”
Jones and his team shared some charts with us to show just how fast this “social entertainment” product is growing inside the decaying husk that is the rest of MySpace.
Here’s what us outsiders see when we look at MySpace traffic:
But here’s what Mike Jones sees. Growing engagement…
…and a growing userbase:
Is there really something there in “social entertainment”? Will Jones have to ditch the MySpace brand to make it work? We sat down with Mike to talk about this and more. Read on!
Business Insider: I keep reading that MySpace isn’t really a social network anymore and you’re not competing with Facebook. Is that right?
Mike Jones: Correct.
BI: So…What is MySpace?
MJ: MySpace is focused on this category we call “social entertainment.” What that means is that when people come to MySpace, we want them to connect with their favourite topics, their favourite bands, their favourite celebrities. We want to create an entertainment stream that’s personalised to them that we deliver to them with up to date content on all these topics they love.
BI: Why have you coalesced around this strategy? What did you see since you took over the job full time, or even before then, that made you feel like this is the way to go?
MJ: We saw that MySpace’s DNA was very much rooted in entertainment. The early adoption by bands on the MySpace platform was something that our audience connected to. We saw a change in the marketplace where these social platforms were becoming the standard way for people to connect to their favourite things, specifically around people and content. We saw an amazing amount of conversations happen in MySoace and we wanted to create a place where we could create a content plus conversation platform that allowed people to connect to their favourite topics within MySpace. We saw both a market influence that drove us here, we saw an audience shift within MySpace that drove us here, and we saw something in MySpace’s DNA that we felt we were the right company to really build a product around this.
BI: When I look at MySpace traffic charts, just from ComScore or any of the outside auditors, it looks like a crumbling mess – a halving year-over-year situation. What numbers are you guys looking at to have a more optimistic picture? Please explain.
MJ: That’s a fair question. First, February was a short month where we and a lot of other sites were impacted. In addition to that, we have an expected audience shift. We launched a new product in November, we’ve substantially changed the value proposition for our audience, and we expect that we’re going to be changing the nature of our registered userbase, which is something that’s been impacting us on our monthly metric basis.
What Comscore doesn’t necessarily capture for us is the internal metrics that show success against the strategy.
It doesn’t show that we’ve roughly doubled our mobile traffic in the last few months because of products that we’ve offered on the mobile platforms. It doesn’t show an increase around our content products. Mainly because a lot of those nuanced metrics are underneath a pool of larger metrics that are publicly displayed.
As far as what we look at specifically, we look at a changing percentage of pageviews where users are engaging on a larger percentage of our content products than they were previously on our social networking products, so we consider that successful relative to our strategy. We look at an incredibly increasing volume of topic follows that our audience has come into MySpace and connecting into their favourite topics on MySpace. In the last two weeks, we’ve nearly tripled our daily topic follows. So people are coming all the time, finding their favourite movies and celebrities and connecting to those topics. We’ve shown a major increase in our audience connecting to our curators. Our curators are our users within MySpace who are really driving the conversation around music and entertainment. We look at these internal metrics saying the platform’s really engaging on this new strategy. With that said, we have an expected audience churn that we’re going through and we’re looking at the internal metrics to understand that the new strategy is showing traction.
BI: So it sounds like you’re describing an even smaller number of real users but a growing, smaller base of people who are following these curators. There’s the curators themselves and the people following the curators – do I have that right?
MJ: I would say we’re going into a new market that’s an extremely large market of entertainment content. I think that we’re migrating portions of our current audience against that strategy. We’re attracting new audience against that strategy and we have a portion of our audience that’s a legacy audience that has to decide whether they want to be a part of that strategy.
BI: In the history of the Internet, brands going in the wrong direction haven’t ever been able to turn it around. Is MySpace, the brand and company name, something that could change eventually?
MJ: We look at companies like Apple, like Nintendo, a whole different set of technology companies that have gone through a lot of different changes from one state of the business to another. I think we’re embracing a completely new strategy and producing products that are vastly different from the products that we had previously. We’re bullish on that strategy, we’re excited about it, and we think it’s going to produce exciting results in the long run. We’re seeing early indications of that being successful. I can’t comment specifically on the brand.
BI: Hearing what you see MySpace becoming, it reminds me more less of Facebook and more of Tumblr’s up to these days. Is that fair? Is there a competition there?
MJ: I’d say MySpace is focused on this topic and curator audience. There’s a lot of interesting platforms doing it. I think the concept of social principles applied to content is something we’re going to see over and over.
Our platform, especially if you look at the way we’re using topics, is unique in the marketplace. I haven’t seen another social platform embrace our topical strategy. The concept of curators is something we pioneered and became public with in November. We’ve seen a lot of competitors follow suit behind that. This differentiator of ours between content and conversation, using curators to create this personalised entertainment experience, I think is very unique from the competition.
BI: When you talk about curators on certain topics, you’re talking about people who write about music and aggregate content having to do with a certain band. That’s the right impression, right?
MJ: Yeah, they’re more trendsetters. You have some that are specific to a single topic, like you have someone who loves Family Guy and they’re constantly talking about a narrow topic like Family Guy. More commonly you have someone who’s dedicated themselves to indie music. They’re exposing our audience to new bands constantly.
If you like independent music, you know there’s a lot of bands you haven’t heard of, you can come to MySpace and friend one of these curators. Then every day you’re going to get four or five articles that they post that are about their discoveries within independent music. They’re going to share songs, playlists, talk about concerts. So we’re using them as a force to be those trendsetters and inspired users who are discovering new things and share them across the network. It’s more broad than music, but music is obviously a place where we have a lot of traction.
BI: When you talk about a single branded place where curators and pseudo-bloggers are creating content and aggregating things, one parallel I draw is the Huffington Post. It sounds a little like what they did.
MJ: I think the way you’re talking about us from a content perspective is very much the way we think about ourselves. It’s a unique place to experience and create this personalised content. I think that a lot of people haven’t gotten that nuance, so the way you’re talking about us is really right. I think it’s a little of the untold story that hasn’t gotten out in the marketplace is how much we have become content-focused, and how it really is a premium environment for content and not just a [something]-oriented destination.
BI: Are you leading a group to buy MySpace.?
MJ: The only statement I’d say is that there’s a single process for running and all interested parties are going through a single process. It works through third-party bankers and the NewsCorp digital strategy team that’s handling the deal.
BI: One thing I’ve seen a lot in writing about MySpace is the idea the idea that these record label deals are an albatross. This is your chance to correct the record. Is that something you can talk about?
MJ: The partnership that MySpace Music has with the variety of record labels we work with is a major strategic asset for the business. We keep in close and consistent contact with all the record labels. We can see music becoming even more of a part of our strategy than it was in the past. It’s something we’re very committed to. We see it as a major strategic differentiator and asset for MySpace.
BI: How do you take this different thing that MySpace is becoming and communicate that to users, or is that something that comes naturally through typical word of mouth?
MJ: I think we’re going to use a few different tactics. We definitely want to please our users so hopefully users feel compelled to talk about it. We have really interesting programs we do, such as the hijack program, where we bring in different different celebrity and music interests to MySpace.
Today we have a major hijack happening with Seth MacFarlane of Family Guy. It brings a lot of exposure to the new product and the new strategy. We look at offline events like secret shows to see how we can introduce this strategy to our audience in the real world. We have other marketing programs designed for the future that continue to reinforce this product direction. What’s different about a large company like MySpace with their rich history in the internet, it’s going to take a little time as we expose this to the world.
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