The considerable resources of News Corp are to be thrown behind an effort to revamp its social network site, which has long been a poor relation to Facebook.
Murdoch looks to fill the gaps at MySpace
Rupert Murdoch plans to breathe new life into MySpace, the social networking site his company, News Corp, paid US$580 million (Dh2.13 billion) for five years ago and which has been going downhill ever since. MySpace in Los Angeles is poised to release plans to reinvent its services in a way that will enable it to harness News Corp's vast store of film and TV content to attract new users. This will mark a return to MySpace's roots as a site where users socialised by forming groups based around their musical preferences.
"MySpace was born as a place where people could develop and express their musical tastes. Broadband enables MySpace to take that DNA and expand into TV, film and games, enabling it to leverage News Corp's vast supply of content," said a source familiar with the situation. MySpace's early lead in the social networking market was rapidly overtaken by Facebook, which last month surpassed the search engine Google in its share of internet traffic. But cracks are beginning to appear in Facebook's strategy. It is facing competition from new mobile players and its users are irritated by what many see as an increasingly relaxed approach to their security and privacy.
Mr Murdoch's strategy to reinvent his ailing social networking website coincides with an increasing availability of broadband in MySpace's home market of the US. The US federal communications commission last month unveiled a national broadband plan to bring super-fast internet connections to 90 per cent of American homes by 2020. The relaunch of MySpace will give the media giant an opportunity to start to use the internet as adelivery mechanism for all forms of entertainment in an age when its satellite and other traditional delivery systems are starting to look dated. By catering to each user's personal tastes, MySpace would enable News Corp to sell packages of film, TV, music and games tailored to each consumer. "By going back to its entertainment roots, MySpace can not only access News Corp's entertainment content but also use its powerful content relationships to bring users content from a wide range of sources," said Mark Little, a principal analyst at Ovum, the media research arm of Datamonitor.
But Mr Little believes there is little chance of MySpace regaining the ground it has lost in the social networking space and that its best chance of success is to reinvent itself as a new type of internet entertainment company. "MySpace is never going to be the leader in social networking, although it does now have the opportunity to be the digital media leader in a new area. But it will have to be clever in enticing users not only with its content but with interesting ways of individually discovering that content." Mr Little said.
Even if MySpace does not directly threaten Facebook's dominant position in social networking, there are other clouds gathering on the leading social networking site's horizon. Like all internet companies, Facebook is vulnerable to the adoption of new technologies by consumers and there is growing evidence that social networking is going mobile. New players in the mobile social networking space such as foursquare and Gowalla go one better than Facebook and offer location-based services. This means groups of friends can track one another's physical presence, converging on a particular venue or simply swapping live photographs and videos. These new sites are exclusively designed for the new breed of smartphones being offered by Google, Apple and Microsoft.
"Facebook has a definite vulnerability in the mobile social networking space," said Mr Little. "They have done a great job on the PC, but they have not transposed those strengths into mobile and are now up against Apple Apps and Google Android phones." According to Ovum, mobile phone apps offer a more simple interface than PCs as all the user has to do is touch the appropriate icon on the mobile phone screen. Research conducted by Ovum among 3,000 social networkers across all demographic groups shows a marked shift towards mobile networking.
"Although most users still use PCs and laptops, there is a significant incremental shift away from websites and towards [mobile phone] apps," said Mr Little. Facebook is also having to fight on another front. Its success has attracted criminal gangs who have developed viruses specifically designed to infiltrate users' accounts. "Koobface, an anagram of Facebook', is a 'worm' we believe was specifically created by an organised criminal gang to infiltrate social networks," said Graham Cluley, a senior technology consultant at the internet security company Sophos. "Once it has taken over an account it can gain access to a user's password. As 33 per cent of people use the same password for everything, this can potentially enable criminals to access the user's PayPal account or, in some cases, even a current account."
He added that a modification on the scam is to use a worm to gain control of a user's Facebook account and then contact their Facebook "friends" claiming to need money wired to them as a result of an emergency such as being robbed while on holiday. Sophos warns against just assuming that everyone on Facebook is who they claim to be. A tragic example of the dangers of social networking was the murder of a 17-year-old girl, Ashleigh Hall, in the UK last October by a man who had posed as a teenage boy on Facebook.
"Security is a huge problem for Facebook as it is impossible to police 400 million users," said Mr Cluley. He believes that another element of the site causing dissatisfaction among users is a lack of privacy. "Most people think of Facebook as a personal site, but anything posted on Facebook can be seen by anyone forever," he said. "Last year, Facebook changed its privacy settings to allow it to share users' information with search engines. Although Facebook say they will remove information from your profile if requested, they will still have no control about how it is being used outside of Facebook."