Myspace (News Corp)
Myspace Decline and Sale
Estimated impact: $545M in value destruction
News Corp acquired Myspace for $580M in 2005 when it was the dominant social network. Under corporate ownership, Myspace prioritized advertising revenue over user experience, becoming cluttered with ads while Facebook offered a cleaner alternative. Sold for $35M in 2011.
Decision context
Whether to prioritize short-term advertising revenue extraction or invest in user experience and platform modernization as Facebook gained traction.
Biases present in the decision
Toxic combinations
- Status Quo Lock
- Echo Chamber
Reference class base rates
Across all 146 curated case studies in our library:
Lessons learned
- Status quo bias in social networks is fatal — users have zero switching costs and will leave for better experiences
- Anchoring to current user numbers masked the underlying engagement decline that preceded user exodus
- Corporate ownership that prioritizes revenue extraction over product innovation accelerates platform death
Source: Felix Gillette, "The Rise and Inglorious Fall of Myspace" (Bloomberg, 2011) (Case Study)
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