It was reported last week that MySpace bought Photobucket, the top photo-sharing site, for $250 million in cash. All of this came less than a month after the high drama of MySpace’s Photobucket widget ban. Why the sudden change of heart?
We’re speculating that it’s all part of MySpace’s master plan to become the next Microsoft—an operating system for Web 2.0 (or should we say 3.0…). Social networking sites (SNS) are fast becoming the new phone number, portal and recommendation engines that link all youth communications and media consumption together. Thus MySpace, the reigning champ of the category, is in an incredible position of power if they start to enrich the site with functionality and content without diminishing user experience.
And they are. In early March they unveiled MySpace News, an RSS aggregator with a Digg-like component that will launch in Q2 of this year. Feeding rankable news content to the MySpace audience will make the site even more sticky (and promote for Fox News stories—hmmm.) In this vein, Facebook just added a classifieds section (à la Craiglist), which MySpace has had since its inception.
It was around the time of the launch that MySpace started blocking third party software. We surmise that their ultimate goal is to take back the precious real estate they sacrificed way back when they started in 2003. Whereas a geometrical set-up such as Mixi in Japan (a box for your musical tastes, fashion, nightlife…) would have enabled them to serve up ads into each category, MySpace is now hamstrung into reclaiming the space with—you guessed it—widgets. Not other people’s widgets streaming in unknown, unfiltered, and worst of all unprofitable content, but their very own widgets. This way, MySpace can employ behavioral targeting to serve ads through their widgets and tap into the enormous potential this form of advertising holds.
Hence the purchase of Photobucket (and their 14 million users). Perhaps the very public shutdown of their slideshows was a scare tactic—a way to say “see, you need us.” But MySpace needs them too. And many other widgets. We’ll see who they buy out next, but we have a feeling it won’t be Hoooka. That’s the small-fish widget they took down, spurring MySpace star Tia Tequila’s lament: “You guys used to be so cool. Don’t turn into a corporate evil monster.” Or Bill Gates.
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