MySpace, Chasing YouTube, Upgrades Its Offerings
Two years ago, millions of MySpace users began adding video clips to their profile pages, helping to give rise to YouTube, which Google bought last October for $1.65 billion. — This week, MySpace, a division of the News Corporation …
Context & Ripple Effects
The move lands against an awkward backdrop: Washington Post reporting last October found teens calling MySpace 'so last year' (In Teens' Web World, MySpace Is So Last Year), even as the site's own user base had seeded YouTube by embedding clips on profile pages — a dynamic that ended with Google paying $1.65 billion for YouTube in October 2006.
MySpace, a division of News Corporation, is now upgrading its video offerings to chase the platform its users helped create. The story drew same-week pickups from GigaOM, the Times' own Bits blog, and Webware, signaling that press and industry attention has consolidated on whether the largest social network can convert reach into a credible video business.
First-order effects
- News Corporation is committing MySpace's massive embedded audience to a direct video contest with Google-owned YouTube, turning what was a passive hosting feature into a branded competitive product.
- Video creators and MySpace users gain a homegrown alternative at scale, while advertisers suddenly have two large social-video inventories to bid between.
Second-order effects
- Google must defend YouTube's momentum against a rival with comparable traffic, likely accelerating content and distribution spending on the video side.
- Other portal-scale players face pressure to declare their own video strategies rather than cede the category, since MySpace's move reframes video as table stakes for social networks.
Third-order effects
- If social platforms keep converting user-generated embeds into owned video products, the line between social network and media company erodes, with advertising dollars following whichever player controls the video experience rather than the profile page.
- The episode hardens a lesson for incumbents: distribution alone does not capture value from user behavior, as MySpace's own users demonstrated by building YouTube's audience inside its walls before the parent company acted.
The trend: Social networks are racing to become video platforms, with Google's $1.65 billion YouTube acquisition forcing News Corporation's MySpace to treat user-generated video as a core business rather than a profile-page feature.