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 / Winter 2009 / Issue 57(originally published by Booz & Company)


Best Business Books 2009: Technology

MySpace’s DNA did not spring from the gene pool that yielded great Internet companies like Amazon, eBay, and Google, but from a fetid digital backwater called eUniverse, based in an industrial park near the Los Angeles airport. The idea sprang from two “cubicle-dwelling marketing executives with no technical prowess or revolutionary ideas,” Angwin writes. As a teenager, Anderson had flirted with the dark-hat hacker underground; he was mentored by Bill Landreth, a well-known malefactor who parlayed a criminal record into a book contract with Microsoft Press. Later, he got involved in a website focusing on Asian pornography. DeWolfe was a frat-boy finance major who took a marketing job during the first dot-com boom. His activities at eUniverse involved creating e-mail spam and spyware; his big success was getting people to download a patriotic cursor (to show support for Operation Desert Storm) that secretly loaded software to snoop on their online activities. EUniverse, writes Angwin, was “the trailer park of the Internet.”

When DeWolfe launched MySpace as an eUniverse property in 2003, it seemed like yet another exercise in bottom-feeding: It was a bald attempt to clone what was then the Net’s hottest newcomer, a social networking site called Friendster. Despite massive buzz and investments from top venture-capital firms, Friendster flamed out while MySpace thrived.

How did two SoCal hustlers beat out a Silicon Valley first mover? One factor was MySpace’s malleability — of all the social networks, MySpace has been the one to allow users the most latitude. This tapped into the teenage urge to personalize a corner of the Internet, even though it wound up making a user’s space the digital equivalent of a disheveled dorm room. Angwin reveals that this was not a conscious management decision, but sloppy programming that enabled users to hack their own pages. And whereas Friendster was built to reflect users’ real identities and help people connect with others in the spirit of an actual social circle, MySpace wasn’t nearly as picky. People could use fake identities or try out alternative personalities. Emerging rock bands or wannabe celebrities were welcome to solicit and link to massive numbers of “friends.” A soft-porn model named Tila Tequila garnered 1.7 million MySpace friends.

Angwin deftly describes how as MySpace grew, DeWolfe and Anderson became more committed to its mission. But they found themselves fighting the fast-buck mentality of its parent company. MySpace had become eUniverse’s most valuable property. The tale takes on Shakespearean tones when eUniverse’s CEO, a golden-tongued businessman named Richard Rosenblatt, enters negotiations to sell the company to Rupert Murdoch’s News Corporation without the knowledge of DeWolfe and Anderson. Another suitor was Viacom, and followers of the long-running war of media behemoths will savor the competition between Murdoch and archrival Sumner Redstone, CEO of Viacom. (Bottom line: Murdoch’s trust in his executives allowed News Corporation to move nimbly, while the paranoid Redstone fumbled the deal by second-guessing his underlings — and then blamed them for losing the prize.)

True to Rosenblatt’s promise, MySpace got Rupert Murdoch on the cover of Wired. And a US$900 million ad deal with Google seemed to make Murdoch’s $580 million purchase price a bargain. But DeWolfe and Anderson — who were shut out of the Google negotiations — still found themselves struggling to control their creation, this time squabbling with Murdoch’s minions. All this was a distraction from the surprisingly strong challenge from Facebook — the threat that MySpace’s founders tried to shrug off during our lunch. (Angwin recounts something else DeWolfe and Anderson didn’t mention during our meal — that MySpace tried to buy Facebook. Twice. Both times, the asking price was way too high for MySpace’s taste.)

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