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  • 1. Are Myspace And Facebook Really Worth What They Are Labelled? A235SLL – How To Do Business On The Internet By Ashley Frere monorailcat.wordpress.com
  • 2. The History Behind Myspace and Facebook
    • Myspace:
    • eUniverse (now known as Intermix Media ) created MySpace in 1998, and was launched it February 1999 .
    • Intermix (and therefore Myspace) were bought in July 2005 for US$580 million by News Corp.
    • Facebook:
    • launched on February 4, 2004, and created by Mark Zuckerberg
    • Microsoft proposed an investment in return for a 5% stake in the company. They would pay an estimated 300 to 500 million dollars for the share.
    • Microsoft  actually ended up purchasing a 1.6% share in the company for $240 million in October 2007.
  • 3. Main Features Of Myspace
    • The home page for the user on Myspace has several options, such as how they can interact with their friends, and how they can edit their profile.
    • The user can edit their home page to suit themselves, so they can decide the look of it, and what information they receive when they log on.
    • The profile page is also fully customisable, to show it is their page.
    One feature of the Myspace profile page is a music player.
  • 4. Main Features Of Facebook The Facebook home page is very different to Myspace, with a list of applications on the left, a requests and status updates on the right, and along the top is a navigation bar for the user, so they are able to get around the site.
    • Down the middle is all what has happened to all of your friends recently, and also some advertisements.
    • The site seems to have much more going on the home page than Myspace, but this is mainly because Myspace focuses on your news, where as Facebook shares everyones.
  • 5. Which Site Is More Likely To Attract Business And New Users? Link Battle for users getting closer and closer, Facebook currently leads. According to this graph, it looks like Facebook is the more likely to attract people due to its rise and how it has caught up with Myspace since 2006.
  • 6. Which Site Is More Likely To Attract Business And New Users? Link Over the past year Facebook has caught up with Myspace, but recently it has started to swing back. According to this graph Myspace is currently gets more page views. But personally in my view, my social network seems to use Facebook much more than Myspace, with not much happening on Myspace. But Facebook also seems to be slowing down.
  • 7. How Does Myspace Make Money?
    • As Myspace has no sign up free, it needs another way to make money, otherwise it will have no appeal to companies wanting to invest.
    • Myspace has adverts on every page you visit on the site. This increases the amount of advertising seen, so increases Myspace’s cut of money
    • As Myspace is a world wide popular page, they can bump up the price of the advertising space. Companies will pay over the top fees so that millions can see their product.
  • 8. How Does Facebook Make Money?
    • Facebook makes the vast majority of its revenue on advertising. To sign up to Facebook is free.
    • Because Facebook has millions of users that visit the site every day, it is an amazing opportunity for companies to advertise on.
    • As major companies will be trying to get their advert on the site, Facebook can increase the price of the advertising space.
    Facebook also accepts donations, and also on the main page there is a gift option, which costs $1 US. If every member bought one a day, that would be roughly $64 million a day
  • 9. So Do The Sites Really Add Up To Their Supposed Valuation?
    • Myspace:
    • Search engine Google signed a $900 million deal to provide a Google search facility and advertising on MySpace.
    • With so many hits a day, the fight for advertising space will mean the price of an advert will go up and up, meaning lots of revenue for not a lot of hassle.
    • Not much else to make money by, as accounts are free and no way of making money out of users except clicking on adverts.
  • 10. So Do The Sites Really Add Up To Their Supposed Valuation?
    • Facebook:
    • Valued at $15 billion by Microsoft, after they bought into the company
    • Has grew so quickly in the past two years, and is prime for advertising on. It has grew much quicker than Myspace did when that first started.
    • Currently challenging Myspace for the number one spot of the social networking, more and more users join all the time, meaning the chance for more money to be made on advertising.
  • 11. Overall Summary
    • The valuations of these two companies seem a bit too high to me.
    • I can see the attraction in investing in these companies, but websites go through trends of popularity, and what is to say that they will continue as they are?
    • They do require investment, and a lot of money is to be made out of the advertising, but I do not agree with the estimated value.
    • But for Microsoft to value Facebook at $15 billion, there must be something there