Just watch MySpace – it's not dead yet

Knocked off its top spot, can this tired social networking site outface Facebook? Oh yes, says Stephen Foley in New York, and here's our 10-point plan to help

It has 127 million users around the world, including more than 70 million in the US. It brings in more advertising revenue than any other social networking site. It is the go-to website for people wanting to explore new music.

And it is owned by Rupert Murdoch, one of the wiliest and most successful media executives in the world. So why have people been writing MySpace's obituary over the past week?

The reason is that, for the first time since it was founded by Harvard student Mark Zuckerberg in 2003, Facebook has recorded more monthly users in the US, MySpace's core market – 70.28 million in May, compared to MySpace's 70.26 million – and there is a palpable sense that MySpace might have been eclipsed forever. Its user numbers are down, in contrast to almost all other social networking sites; Twitter is the fad of the moment and Facebook generated a whole burst of new activity last weekend when it introduced "vanity URLs" so users can have their own names in their Facebook web-page address.

The news out of MySpace, meanwhile, was contrastingly bleak. It sacked 420 people at its US offices on Tuesday, 30 per cent of the workforce. Google is grumbling about the $300m a year it pays to place search-related ads on MySpace, and won't sign up to pay anything like that amount again next year. There are rumours that Mr Murdoch's News Corp is to restructure its entire internet division, Fox Interactive Media, which is again going to miss the mogul's $1bn annual revenue target.

A generation of internet users is familiar with the pattern of social networking sites, which bubble up in popularity, then fade as users move on to other, more novel, interesting or trendy places. Every MySpace obituary refers to Friendster, the American social network du jour of five years ago, now buried alive somewhere deep in cyberspace.

Facebook long ago eclipsed MySpace internationally; it now has 307 million users worldwide. The heady days of MySpace – when everyone was signing up to design their own page and the Arctic Monkeys were at No 1 in the charts because of interest generated on the site – are sepia-tinted memories now. Even loyal users are spending less time on the site. Techcrunch, Silicon Valley's most popular blog, called it "game over" for MySpace, and there is something approaching a consensus that it is doomed to a slow death, never having converted those eyeballs into a profit.

MySpace's latest executives – News Corp's new digital chief, Jonathan Miller, from AOL, and MySpace's chief executive, Owen Van Natta, brought in because he used to be chief operating officer at Facebook – beg to differ. So do a minority of pundits. Nothing is inevitable, after all. So here, with thanks to those optimistic pundits, and in the spirit of constructive suggestion, is The Independent on Sunday's 10-point plan to save MySpace.

Stop comparing

Facebook and MySpace are rivals for internet users' time, for sure, but they are not the same thing. Even if everyone on Earth uses Facebook as a social utility, a directory and messaging centre for their friends, profitable millions can also use MySpace for more creative or entertainment-related pursuits. Online, as in life, people will belong to numerous social networks.

Innovate in entertainment

MySpace knows its core strength is as a place for exploring music and video. At the D: All Things Digital conference this year, Mr Van Natta pointed out that MySpace is the only social networking site with licensing deals with all the major record labels, which should mean it can eclipse the likes of Pandora in the US and Spotify in the UK as a personally tailored radio station.

Harder work needs to be done to create a must-watch MySpace TV, too, using broadcast and original content. If the offering is right, people might even pay for subscriptions to exclusive content.

Be creative and offer more

MySpace users can do creative design things with their profiles, they can interact with each other, and they can listen to music and watch videos – "these are the three things you can do on MySpace, and that's not many things," says Charlene Li, founder of Altimeter Group, a social-networking research firm. "It has doubled down on the entertainment space and served those users very well, but those users want to do more than that."

When Facebook threw open its source code to developers, who then populated the site with thousands of "apps", such as online games, for users to try, it meant there was always some new reason to spend time there. MySpace needs to find ways to bring in new activities. Li suggests travel and shopping as whole new areas to explore, where one popular innovation could start a revitalising wave of people coming to the site.

Communities within the community

Don't be scared to see MySpace fragment. One of the problems currently, says Roger Kay, founder of Endpoint Technologies Associates, a consultancy, is that the site is littered with singles ads and is used widely for dating, but without really talking about it. His view is that MySpace must "decide on its personality, either clean it up or dig right in on the sin and have a good time". An alternative would be to try to more clearly form communities within communities which can have different personalities – and which will keep squeamish advertisers away from racier content.

Get a real-time buzz

The technology buzzword of the moment is "real-time". The real-time web gives us the latest news, in the world and from our friends, in real time – a phenomenon embodied by Facebook's constant status updates and rolling news feed, and by that incessant Twittering. MySpace looks static by comparison.

Clean up the design

Millions of users who switched their loyalty from MySpace to Facebook cite the crispness of the Facebook design as one of the main reasons. The design anarchy of users' personal MySpace pages often spills over into the communal pages of the site. Personal Facebook pages require little maintenance to look busy, something that is not the case on MySpace.

Cut out the spam

MySpace gained a reputation for junk email and nasty pop-ups, all the stuff that infuriates users. It has made a lot of progress, notably winning the internet's biggest legal pay-out against the notorious "Spam King", Sanford Wallace, but it is a constant battle.

Change the internal culture

Roger Kay says that networks are "serendipitous, like gravity pulling together great stars", and MySpace executives know perfectly well that the necessary innovation and rapid experimentation – Mr Van Natta was uncharacteristically prosaic in describing it as "trial and error" – is more likely to be possible in a start-up culture than in the bloated environs of a multi-national corporation. The job cuts of last week came in reaction to the advertising slowdown, but also provide an opportunity to create a less bureaucratic atmosphere.

More cuts are being rumoured as that process continues, and overseas operations, including those in the UK, are yet to be trimmed.

A fresh relationship with advertisers

In the search for profit, the focus turns from cutting costs to raising revenues. Advertising has brought in much less than expected, because marketers have discovered it to be less useful than they hoped. But advertisers are nonetheless itching to use social networks to reach customers, and there are numerous other ways to monetise MySpace's millions of users. Selling data to allow for much more targeted ads is a tricky area, for privacy reasons, but Charlene Li, for one, believes there are ways to satisfy all concerned and to serve up ads to friends based on a user's online shopping habits, for example. "If I buy something, it is likely that my friends will be interested in buying it too," she said.

New commercial partnerships

As MySpace Music has teamed up with the record labels to sell downloads, concert tickets and merchandise, the site can forge similar partnerships in a wide variety of other ways. A venture with Citysearch, which produces guides to local businesses, is a tip-toe in that direction, and one can imagine revenue sharing with e-commerce sites, local restaurants, ticket vendors, fashion houses and a potentially huge array of other businesses – if only MySpace can invent the must-use services that forge new communities within its still large community, whose gravity pulls together some of Mr Kay's great new stars.

***

Slash and burn

Rupert Murdoch, who once called himself a "digital immigrant", had high hopes for MySpace, for which he paid $580m. Murdoch never knowingly overpays for anything which is why MySpace is undergoing the Murdoch slash and burn treatment. As chief executive, Owen van Natta, put it last week staffing levels were bloated.