Two weeks ago, my friend Jay Weintraub and I give a presentation at the AD:TECH Chicago Conference entitled A Crash Course on the Digital Marketing Vendor Landscape. During the course of that presentation, I talked about MySpace along with Intermix, a public company which owned 53% of the stock of MySpace. I mentioned that I thought MySpace was one of the most interesting companies to look at, because the business model had the potential to be every bit as significant in terms of social impact as Yahoo, Amazon, eBay, and Google have been. I felt that MySpace allowed people to connect in fundamentally new ways, and had the ability to change the infrastructure of our society in a truly significant manner. Last week, it was announced that Intermix and MySpace would be acquired by Fox Interactive Media (a subsidiary of Rupert Murdoch's News Corp) for $580 million, adding more than $70 million to Intermix's market capitalization.

By 2002, Internet usage extended deeply into socio-economic circles outside of the professional business world. That year, a new social network site called Friendster was launched by Jonathan Abrams, with some elements similar to the sixdegrees.com model. While the participants on sixdegrees.com seemed to be primarily white-collar business professionals, Friendster had a broad appeal to many other segments of our society. Friendster was COOL, and quickly reached many millions of registered users, each with an individual profile in the system that they could use to meet and network with others. Young adults loved it, and started spending the majority of their free time networking on Friendster. Friendster seemed to have an unbeatable competitive advantage in owning a potentially highly lucrative new market.

I immediately recognized the tremendous potential of sixdegrees.com's business model and that what they were doing offered revolutionary prospects for creating new ways in which people could connect and interact in our society. Nonetheless, sixdegrees.com failed to gain sufficient traction as a business, and shut down in 2001. Sixdegrees.com failed for a number of reasons: 1) web technology was not yet sufficiently mature to support the kind of rich features that were ultimately necessary to make this type of application succeed; 2) they failed to reach a critical mass of users before their money ran out; 3) they failed to recognize what features would be successful in keeping members engaged with the sixdegrees.com brand; 4) they were impacted by a post-April 2000 recession, later further exacerbated by 9/11, and those events struck at the core of their ability to find advertising revenue; and 5) the online advertising industry was not mature enough to provide sufficient advertisers supporting their business model. Of all of these factors, it is most likely the last two that in the end were the largest factors in sixdegrees.com's demise.

In late 1998 my friends Joe Andrieu and Christine Harmel introduced me to a web site called sixdegrees.com. You've surely heard of the six degrees of separation concept - where everyone on the planet is supposedly connected to each other through no more than six people. Well, they hadn't quite connected the whole world yet, but there were over a million people participating in sixdegrees.com, and over 900,000 of them were connected in one giant chain by the time I joined. Sixdegrees.com attempted to develop new types of connections among its members to build a rich online community.

July 25, 2005 "We are the music makers, and we are the dreamers of dreams." -- Willie Wonka, quoting Arthur O'Shaughnessy's Ode . Cliff Kurtzman Photo Courtesy EPIZENTRUM Something truly extraordinary has been happening in the online world over the past two years, but unless you are between the ages of sixteen and twenty-five, you probably don't even know about it. But that won't last much longer. In late 1998 my friends Joe Andrieu and Christine Harmel introduced me to a web site called sixdegrees.com. You've surely heard of the six degrees of separation concept - where everyone on the planet is supposedly connected to each other through no more than six people. Well, they hadn't quite connected the whole world yet, but there were over a million people participating in sixdegrees.com, and over 900,000 of them were connected in one giant chain by the time I joined. Sixdegrees.com attempted to develop new types of connections among its members to build a rich online community. I immediately recognized the tremendous potential of sixdegrees.com's business model and that what they were doing offered revolutionary prospects for creating new ways in which people could connect and interact in our society. Nonetheless, sixdegrees.com failed to gain sufficient traction as a business, and shut down in 2001. Sixdegrees.com failed for a number of reasons: 1) web technology was not yet sufficiently mature to support the kind of rich features that were ultimately necessary to make this type of application succeed; 2) they failed to reach a critical mass of users before their money ran out; 3) they failed to recognize what features would be successful in keeping members engaged with the sixdegrees.com brand; 4) they were impacted by a post-April 2000 recession, later further exacerbated by 9/11, and those events struck at the core of their ability to find advertising revenue; and 5) the online advertising industry was not mature enough to provide sufficient advertisers supporting their business model. Of all of these factors, it is most likely the last two that in the end were the largest factors in sixdegrees.com's demise. After sixdegrees.com, there were many other online social networks launched, both for personal networking and business networking. Ryze and LinkedIn are two of the better known business networking sites. In neither case do I find the business model to be terribly exciting, nor have I found them to actually be useful for productive networking purposes. By 2002, Internet usage extended deeply into socio-economic circles outside of the professional business world. That year, a new social network site called Friendster was launched by Jonathan Abrams, with some elements similar to the sixdegrees.com model. While the participants on sixdegrees.com seemed to be primarily white-collar business professionals, Friendster had a broad appeal to many other segments of our society. Friendster was COOL, and quickly reached many millions of registered users, each with an individual profile in the system that they could use to meet and network with others. Young adults loved it, and started spending the majority of their free time networking on Friendster. Friendster seemed to have an unbeatable competitive advantage in owning a potentially highly lucrative new market. But then during the last half of 2003, the unbelievable happened. Friendster completely dropped the ball. While the folks running Friendster were busy negotiating deals with venture capitalists, they stopped listening to their users. The site slowed down under a heavy user load to the point where it became virtually impossible to use and navigate. The management of the company completely failed to understand how to evolve the site to improve it and serve the needs of its user base. As Friendster withered and ground to a halt, along came MySpace, a social networking company that did virtually everything right. I discovered MySpace almost immediately upon its launch in late 2003, and it was clear that they were attempting to do extraordinary things. While they started out looking pretty much like a Friendster clone, in short time the differences were apparent. Here are some examples of the things that MySpace has done right: While the "Space" in MySpace refers to cyberspace rather than outer space, the principals of the company clearly exercised "rocket scientist" type creativity in building their business. They designed their service to maximize the degree of creativity that their users would be able to enjoy in customizing "their space" on the Internet frontier. MySpace embraced a love of music and music fandom that its core audience (primarily Generation Y individuals in the 16-25 age range) is strongly passionate about. MySpace's tie in to the world of music has enabled it create a degree of passion amongst its users that is usually reserved for rock bands. MySpace designed their business to continually talk to, listen to and solicit feedback from their users. MySpace understood that creating a community means more than just getting lots of people to sign up and create profiles. They had to provide the tools to allow them to interact in rich ways while online. They have continually improved their service and added new features and new ways to interact. MySpace made a decision not to try to be everything to everyone... MySpace is very coarse, and much of the content on the site would be offensive to many in our society. But from its inception, MySpace decided not to censor any content except for explicit nudity and hate speech. And the "wild wild west" edginess of MySpace is a large part of its appeal to those that love it and spend much of their lives interacting with others through it. While the appeal of MySpace extends to many well beyond its core audience in terms of age, it is also worth noting that there are many for whom MySpace will hold no appeal whatsoever, and it is most certainly not an appropriate place for those under the age of sixteen. If MySpace had tried to be something for everyone, it would most likely have failed to be anything to anyone! By May of this year, MySpace had reached around 20 million registered profiles, it was adding an average of more than 75,000 new profiles to its system each day, and it had reportedly surpassed Google and Hotmail to become the fifth most active site on the Web in terms of page views per month (according to comScore Media Metrix). Two weeks ago, my friend Jay Weintraub and I give a presentation at the AD:TECH Chicago Conference entitled A Crash Course on the Digital Marketing Vendor Landscape. During the course of that presentation, I talked about MySpace along with Intermix, a public company which owned 53% of the stock of MySpace. I mentioned that I thought MySpace was one of the most interesting companies to look at, because the business model had the potential to be every bit as significant in terms of social impact as Yahoo, Amazon, eBay, and Google have been. I felt that MySpace allowed people to connect in fundamentally new ways, and had the ability to change the infrastructure of our society in a truly significant manner. Last week, it was announced that Intermix and MySpace would be acquired by Fox Interactive Media (a subsidiary of Rupert Murdoch's News Corp) for $580 million, adding more than $70 million to Intermix's market capitalization. Jay wrote an article last week for the publication DM Confidential that discusses the rise of MySpace in more detail. I am pleased to have permission to include Jay's article here for our Apogee readers.