Sunday, March 4, 2007

MySpace Controversy

MySpace is another craze in the web world nowadays. According to Wikipedia, MySpace is a social networking website offering an interactive, user-submitted network of friends, personal profiles, blogs, groups, photos, music and videos. MySpace was founded in July 2003 by Tom Anderson, Chris DeWolfe and a team of programmers, and partially owned by Intermix Media. It is now owned by News Corporation, who bought the service in July 2005 for US$580 million.

The current MySpace is a sequel to the older version which was forced to shutdown in early quarter of 2003 after being in existence as early as 1998. It is reportedly attracts as high as 230,000 new registrations per day, with the 100 millionth account being created in August 2006 and is believed to have at least 160 million population as of today.

Although there are other similar services like Friendster, Yahoo! 360 and etc; MySpace have overtaken the ranking in term of page views and features. However, an article written by journalism student Trent Lapinski, "MySpace: The Business of Spam 2.0", published by the Silicon Valley gossip blog, Valleywag, alleging that what was now regarded as a social networking website had been originally designed as a spam delivery system aimed at exploiting Friendster, and had initially gained popularity through an intensive mass email campaign rather than word of mouth. Lapinski claims that MySpace was actually created by a marketing company known for viral entertainment websites, pop-up advertising, spam, spyware and adware, and their executives are tied to investment scandals.

Brad Greenspan (the former Chairman, CEO and largest individual shareholder of Intermix Media and who also claims to be the true "founder of MySpace") believed that acquisition of MySpace as "one of the largest merger and acquisition scandals in U.S. history". His published "The MySpace Report" main allegation is that News Corp. should have valued MySpace at US$20 billion rather than US$327 million, and had, in effect, defrauded Intermix shareholders through an unfair deal process. A quote from his report says, "UBS Internet analyst Aryeh Bourkoff pegged Myspace's value today at between $20-$25 billion, while Jordan Rohan of RBC said recently it could be worth $15 billion dollars. News Corp.'s market valuation has increased by approximately $12 billion dollars since the transaction occurred less than a year ago. As a publicly traded company, Myspace would likely command an even greater valuation which was the path Myspace was going down for the benefit of Intermix shareholders and Myspace users in the early summer of 2005. The Myspace/Intermix transaction was so low compared to other internet transactions that it is raising eyebrows by analysts and media everywhere. Everyone seems to be asking how News Corp. got such a good deal. It seems too good to be true!".

But then, should all these reports and allegations stops you from signing up with MySpace? With features MySpace could provide, it certainly qualify them as social networking website, allowing you to link-up with whomever you choose. They have an interesting product that can keep people interested, had actually helps certain social networks and individuals succeed in an environment/marketplace previously unavailable to them. In my own opinion, i believe only a small fraction of web users will take all these facts and figures into their consideration. They may think Tom and others in MySpace as unethical, but surely million of other won't even care about it as long as they get what they want, regardless or the origins of the host company.

I have one!!

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  • From Kuala Lumpur, Malaysia
  • A simple man trying to live a simple life.
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