.jpg "Why Facebook borrowed $100 million for servers")
Valleywag
Does Trent Lapinski's exposé about MySpace (digest version here) read like a conspiracy theory? Sure. Does our boss think it's over-outraged? Sure, but you can't trust him, he believes in the lone gunman and a real moon landing. Buy the anger or not, this guest feature story is a great read for those of us who are goddamn sick of Tom, Tom, Tom.
By Trent Lapinski
By now, everyone knows what MySpace is—or at least, they think they do. The generally held assumption is that MySpace is a social networking site: "a place for friends," as their slogan puts it. In reality, MySpace is the next generation of marketing, advertising and promotion, exquisitely disguised as social networking. Simply put, MySpace.com is Spam 2.0.
Spam in Sheep's Clothing
On July 11th, 2006, Hitwise reported that MySpace had "surpassed Yahoo! Mail as the most visited domain on the Internet for US Internet users." Clearly, MySpace has become almost ubiquitous—everyone and their mom have a profile up, from the fourteen-year old girl next door to Madonna. Tom Anderson himself—one of the site's founders and every MySpace user's number one "friend"—has over 109 million pals with profiles, and that's just today; by next week that number could easily have increased by millions. What's interesting is that most users don't know that Tom Anderson is more of a PR scheme than anything else—the mascot designed to give a friendlier feel to a site created by a marketing company known for viral entertainment websites, pop-up advertising, spam, spyware, and adware.
Most users believe that MySpace started as some kind of fluke—a happy accident that began in Anderson's bedroom or garage—and many still don't wonder, know, or care about the site's real business history and model. Heralded as a haven of DIY self-expression, MySpace was actually created by executives whose backgrounds are anchored in spam and mass marketing, and who are tied to investment scandals. With his almost alternateen good looks, Tom Anderson has served as an exceptionally convincing distraction. The PR campaign is one of MySpace's two strokes of genius, brilliant, but not groundbreaking.
The real genius of MySpace lies in it's re-imagining and repackaging of spam. While most internet users expend time and energy attempting to keep it out, MySpace is spam that they actually invite in.
Ancient History
Internet spam originated as classic, straight-up, unwelcome, in-your-face-and-inbox advertising and marketing. At its worst, it comes from "Nigerian Bankers" and swindlers peddling Viagra, and more likely than not, this early incarnation of spam—we'll call it Spam 1.0—is lurking in your inbox right now. eUniverse, the company that essentially created MySpace, was a pioneer in this field. Headed by CEO, founder, and Chairman Brad Greenspan, eUniverse (now Intermix Media), was a multimillion-dollar marketing and entertainment company known for sites like Skilljam.com, pop-up advertising, unsolicited mass emails, spyware, and the adware behind controversial peer-to-peer file sharing network Kazaa.
Also essential to the creation of MySpace is current CEO Chris DeWolfe, who from October 1999 through March 2001 acted as the VP of Sales and Marketing at Xdrive Technologies, Inc., a company that offered millions of users large amounts of free online storage during the dot-com bubble. The business of "free," while not necessarily a lucrative enterprise for an online file storage company, would prove to be an essential building block of Spam 2.0 and MySpace. As a source close to DeWolfe at Xdrive put it, "DeWolfe learned that people will sign up for almost anything that they find useful, and they could care less about the fine print."
Xdrive hit hard times when the dot-com bubble burst, and in March of 2001, DeWolfe was laid off along with his entire marketing department. He quickly set up a new email marketing firm named ResponseBase. DeWolfe recruited and hired most of Xdrive's former marketing team for this endeavor—specifically, the employees who had been responsible for the production of Xdrive's email-based newsletter called "Intelligent X." At its peak at Xdrive, 8 million users subscribed to "Intelligent X."
Tom Anderson, the eventual face of MySpace. was originally hired as a copyeditor in DeWolfe's marketing department at Xdrive, and accompanied DeWolfe to ResponseBase when Xdrive laid them both off.
DeWolfe's new company, ResponseBase, was purchased by eUniverse on September 9, 2002. At the time of the purchase, ResponseBase had upwards of 30 million e-mail addresses at their disposal. This partnering of ResponseBase and eUniverse was the moment of inception for MySpace, although at the time neither DeWolfe nor Greenspan knew what path they were on, and the actual, conscious conjuring of it wouldn't happen until later.
In terms of future visibility and pseudo-celebrity status—Tom Anderson, the friendly face of MySpace and every member's number one "friend" stayed with DeWolfe at eUniverse.
Also of interest, the acquisition of ResponseBase by eUniverse involved a finance partnership, TTMM, LP., consisting of Andrew Wiederhorn and his wife Tiffany. Wiederhorn was a high school classmate and past business associate of DeWolfe's, and in the late 90s DeWolfe was VP of Marketing at First Bank of Beverly Hills, a co. of WFSG purchased by Wiederhorn's former company Wilshire Financial Services Group. In late 2002, DeWolfe joined Fog Cutter Capital Group, Wiederhorn's new investment operation. At this time, Wiederhorn was under legal investigation for his activities with Wilshire Financial Services Group, and as of August 2004, Wiederhorn began an 18-month jail sentence for felony charges. Despite Wiederhorn's predicament, he kept a seat on the board. Donald Berchtold, Tiffany's stepfather, was temporary CEO while Wiederhorn was in jail. The investment group put Wiederhorn on a "leave of absence" and paid him an annual salary of $350,000 while he sat in federal prison. FCCG had a 3-year contract with Wiederhorn starting in 2003 wih an annual salary or $350,000 plus bonus. Ultimately, Wiederhorn served only 13 months in jail and upon his release, after completing mandatory work program, he received a $2 million bonus to cover restitutions from Fog Cutter Capital Group and resumed his duties as chief executive.
DeWolfe left Fog Cutter Capital Group just a few months before Rupert Murdoch's News Corporation purchased MySpace.
Recent History
The MySpace that we know was conceived about a year after the 2002 launch of Friendster. Preceded and influenced by Ryze, a social networking site which focused on business, Friendster offered a new twist: the site connected people through networks of friends for the specific purpose of dating and making new friends.
In August of 2003, Brad Greenspan received and accepted an invitation to join Friendster from Chris DeWolfe, who had been a member since June 2003. Once Chris DeWolfe, Tom Anderson, and other eUniverse employees had all set up Friendster accounts, the ball was rolling. Recognizing the potential of the Friendster concept, a plan was hatched to quickly mimic the appealing features of the site, re-brand it as MySpace, and then out-market them using eUniverse's resources. According to internal emails and documents provided by Brad Greenspan and sent between eUniverse executives and the team at MySpace, DeWolfe's squad worked fast: MySpace 1.0 was ready within ten days. As part of the internal testing and promotion of the site, the company held a contest to see who could sign up the most people. The hope was that if all 250 eUniverse employees brought on 10 friends, they would have a starting user base of 2,500. Even self-proclaimed loner Tom Anderson took part, stating in an email, "I am as anti-social as they come, and I've already got 20 people to sign up."
So it happened that MySpace essentially blossomed into Spam 2.0 out of seeds planted by DeWolfe during his Spam 1.0 days. eUniverse's business was booming when MySpace launched, so in retrospect it's almost endearing to learn how tentatively they tested and promoted the site. Considering the resources of connectivity that the project started with, MySpace was arguably assured a strong launch. At that point, eUniverse had over 50 million email addresses in their database, as well as over 18 million monthly web users. Originally, DeWolfe's business model was intent on selling accounts to MySpace, but it was Greenspan who proposed to keep MySpace free and to make profit through advertising. Greenspan and eUniverse even cannibalized valuable existing websites they owned, such as their paid dating service, CupidJunction—a top dating website with over 3 million users. Members at CupidJunction were encouraged to set up free MySpace accounts. Unfortunately, Greenspan was forced out of the company soon after MySpace's launch.
With the site quickly gaining popularity, and Greenspan no longer providing integral direction, DeWolfe and the MySpace team moved to create a false PR story that would best reflect the ideals and tastes of its growing demographic. They wanted to prevent the revelation that a Spam 1.0 company had launched the site, and created the impression that Tom Anderson created the site, and the lie worked.
The venture, of course, turned out to be a huge success. MySpace has spawned an incredibly successful twist on the age-old art of self-promotion, allowing—even encouraging—the marketing of everything from bands to businesses on their site. Essentially, they've opened up a channel through which to solicit and promote everyone and everything—most importantly the individual. The whole site is, in essence, a marketing tool that everyone who registers has access to. Users constantly receive spam-like messages from said bands, business, and individuals looking to add more "friends" (and therefore more potential fans, consumers, or witnesses) to their online identity. A testament to this strange new social paradigm is the phrase "Thanks for the Add," a nicety offered when one MySpace user "adds" another as a "friend."
Best yet, to use the site, members must log in, causing them to inadvertently view advertisements, and then read their messages on a page with even more advertisements. In the world of MySpace, spam is earth, air, fire, and water.
Super Publics and the Wisdom of Crowds
As for Brad Greenspan, who had offered his resources and full-fledged support, sought capital for the site. He was superseded by two eUniverse executives situated below him—Brett Brewer and Chris Lipp—who enabled an investment group named Vantage Point to assume a majority of preferred stock in eUniverse through defrauding stockholders. Once Vantage Point was in control, Greenspan was forced out of his position, maintaining 30% of shares in the company at the time, and only held 10% of the company by the time MySpace and Intermix Media (eUniverse) were eventually bought by News Corp. Various other corporate dramas have ensued, including the sale of Intermix Media (formerly eUniverse, and the umbrella company to MySpace) to Rupert Murdoch's News Corporation in a deal that has been described as a cash-out merger as a result of an unfair process and at an unfair price. Somewhat justifying suspicions, Viacom (the company that owns MTV) went on the record stating, "It's fair to say that we had an opportunity to participate in the process [of purchasing MySpace]. We looked closely at MySpace, but didn't fit our financial filters." Further justifying suspicions, The New York Times recently reported that Chris DeWolfe, Tom Anderson, and other MySpace employees now employed by News Corp. received multimillion-dollar bonus payments "to smooth the feelings that were ruffled when Intermix was sold, dragging MySpace along with it against the will of its founders, who received only a small portion of the sale price."
Base business details and corporate scandals aside, the crucial story here is how a site built on a foundation of spam has become one of the most culturally, socially, and technologically influential websites in the history of the Internet. To their credit—and an important key to the site's popularity—the MySpace team has intuitively gone with the flow, treating their users as co-developers (whether by luck or by wisdom), and allowing network effects from user contributions to steer their evolution in many ways—a fundamental difference between both Web 1.0/2.0, and Spam 1.0/2.0.
A social paradigm has shifted with the tipping of MySpace. It's incredible to consider, but Spam—as negative a connotation as it has—has morphed to enable and fuel the massive development of an incredible Super Public. Tom Anderson and Chris DeWolfe may not even fully recognize the fantastic longitude and latitude at which they stand.
It's no wonder that a site this popular has been a consistent newsmaker, repeatedly finding itself at the center of various controversies. MySpace has become a sort of Super Public portal—entry to a world defined by an ever-changing digital architecture that creates pathways for connection between individuals who might otherwise (even elsewhere on the internet) never have met. In addition to facing accusations of not sufficiently protecting its underage users and subsequently being sued for thereby enabling sexual assault, MySpace has inspired debate over free speech from high school students to porn stars.
What truly remains to be seen is not the repercussions of misleading PR campaigns or bad business deals, but whether MySpace teens will fall victim like Narcissus to the worship and distortion of their own (and others') online reflections, or if they will lead the way in navigating a new world comprised of Super Publics, where old cultures collide, and new cultures are born.
By Trent Lapinski.
trentl@gmail.com
trentl.com
Lapinski is a freelance writer who resides in Orange County. He is also a starving college student.
Comments
This is, in a word, retarded. Basically a C+ college term paper, if that. And amazingly, no mention of the (significant) role that Intermix's adware business and the Spitzer suit played in the decision of Intermix and their VCs to sell out. No mention of the relative pittance Anderson and DeWolfe made in the sale.
What's more, this Lipiniski character has no concept of what a 3 million user email database can do for you in terms of launching a site like this, i.e. next to nothing. You can purchase a 3 million name email database for a song. Dropping an offer to a database like this might run you $0.50 CPM - or $1,500. Any drops to the Cupid Junction database I'm sure meant nothing to the growth of MySpace.
MySpace's founders may have been shady. Shocking. If you have any concept of what ResponseBase is or what Intermix is you knew this already. Am expose? Give me a break.
Rockwell hit the nail on the head. It's funny how a "brilliant" idea that was bought out for a nice sum can make some "journalists" so quickly and easily forget history...
I have never commented on anything before. In my life. Seriously.
However, I HAVE to chime in on this article.. it has to be one of the most naive, uninteresting, retarted assemblage of lame facts and conclusion-less nonsense I have seen.
This 1st grade expose of ... NOTHING ... failed to demonstrate anything except the youthful nature of its author.
Why have you failed your loyal reader base, Nick? Keep it real, please! We want raw Web2.0 cynicism and humor-rich battery of good-for-nothing SV zillionaires. PLEASE KEEP RETARTED AUTHORS AWAY FROM YOUR SITE!
Semi-retarted Author signing out...
"Spam"... You keep using that word. I do not think it means what you think it means.
Rockwell is correct. Startup Review examines the Intermix / ResponseBase spammings:
Yes, MySpace is a shop for spam, etc. But to pass of its success as merely owing to spam is completely ludicrous. They were actually quite clever in promoting music to get people join in groups. Similar sites should take note of this phenomenon.
Article has made it onto Digg: http://digg.com/tech_news/What_News_Corp_doesn_t_want_you_...
Dicey:
I love when people who are commenting on someone else's intelligence mis-spell "retarDed." "Retarted," what is that? Being made a tart again? Usage: "She had left behind promiscuity, but is recently retarted."
On the article, I thought it was informative, but it wasn't Earth-shattering, and I don't fell like I've been given a revelation on my MySpace involvement. In two years I've never been infected with a virus or adware from MySpace use, and I've never clicked an ad link. What does concern me? The location-specific marketing. I don't like the idea that my personal registration info or IP is used to place "houses in Chesterfield" or "Singles in Midlothian" ads on my user console.
This author is the kind of guy that responds to advertising, spam or imagined spam, with threats. Cries about the postcards that drop into his lap when he opens his Playboy and sends AOL disk back postage due. and then writes about it. He has no concept of the free market system or entrepreneurism. To him the Internet is nothng more than a newsgroup where he can argue with MAC users and disscuss overclocking his P4.
"Spam in sheeps clothing?" Is anyone retarded enough NOT to know that MySpace exists as a marketing tool and nothing more? I'm pretty sure if anyone doesn't know that it's because they are blind. Literally. You have to be to miss the fact that 90% of the site's content = ads. This is about as revolutionary as an expose about how McDonald's is bad for you.
Actually, I am a Mac user and I use Gmail so I don't have to worry about spam. Also I work for SuicideGirls, not Playboy, and I'm sporting core duos not a P4 in my MacBook.
Good for them. They make money, everyone using the site gets to do their thing, and bands get free publicity.
I'm not seeing a downside here.
trent: nj on the fact-finding, but i think the consensus is that people want more analysis.
for instance, if it's really spam "2.0," why doesn't my$pace use the tubgirl-copia of personally identifying information users put on their profiles to truly deliver personalized spam?
google may have a list of things a user might search for. myspace has the content and the context combined.
Trent,
If you work for SuicideGirls, wouldn't you have some prejudice in the matter? SG is as much a "myspace". I'm not saying they spam, though. :)
I'm going to echo the sentiments of Rockwell, diceylingo, barelyfitz and others: this article is a joke. It was laughably devoid of any meaningful content or criticism of Myspace. Yes, companies advertise their products. Yes, public forums are used by companies to advertise their products. Neither of these are particularly hard-hitting breakthroughs of journalism.
If you really are a journalism student, please consider attending class occasionally, or ideally switching majors.
Optical Discharge:
I hate to be a dick about this, but when you call someone else out, you better be damn sure that you're not going to make the same mistake. You said:
Although, in the following statement you said:
My question is, you don't "fell" or you don't "feel"?
Regardless, I don't really get too involved the history of company's like myspace. The website is poorly engineered and seems have a lot of "Ooops, I did it again! The admin has been notified" shit going on with it.
Anyhow, everyone should get together and have a big myspace.com hug and get along.
best friends 4 ever!!!
This article only reveals what I already know plus a little more backround info on the people behind myspace. To tell you the truth, I'm sick of myspace and all it's adds and all the friend request I get every day from fake profiles. I actually did get a virus from myspace because of one of those fake profiles. The first time I got one I clicked it and it went to another site where it d/l a codec that killed my Internet connection. That is why I always use Firefox, no matter what.
You work for SuicideGirls? No wonder you can spot an exploitation site that masquerades as a community.
Anyone who thinks SuicideGirls is anything but a porn site (that exploites its girls, mind you!) should do a little reading. Ask ANY of the original SGs how they feel: Exploited, used, lied to; all by a GUY who runs the site, not "missy" (The Tom of SG) as the PR lie goes.
BarelyFitz wins the thread.
/fark
Seriously, MySpace is a marketing vehicle? Wow, I'm shocked. At least I can go to facebook and hang out with all my exclusive college student friends.
shit.
Ok here we go you all have my attention now in the past we have all took for granted that we as web surfers, should take a look where we have went, what we have seen. All this Spam that? Is Bovine Scatology! Or Bull Sh**! Spam, is the crap Yahoo can't filter, drugs insurance, and Ipod's. You can get a free this or that, only if you BUY something. Go figure it all come's down to money! Yes, but look at it through the eyes of a Member! Hotmail does the same thing yahoo and this just in MSN! It is all about who is going to pay whom for letting this person put a note a hint or even a fragment of anything in front of ALL OF US!
MySpace just did it better and faster now they want to try and hurt it. Just like ENRON some day some where someone will buy it and it will be like the achillies tendon being cut out from underneith them.
From a myspace member point of veiw. I am triing to find something, some nitch in life. Bill has Software Hardware. Monet had a painting or 2. But like Leonardo, myspace is Brilliant, it is free, Yes you get the occasional peace of trash you have to throw away, but it is free. Cupid isn't free. Hotmail, isn't 100% free. MySpace is. Families, Buisiness, Homes. Even careers made from here. It is a breakthrough in talkin to that Beautiful woman, or girl. It is a way to be heard. How many suisides have you heard of from here? It is an outlet, a freeze(Hit), of a leagal drug. I personally do not give a rats as* if there is money in advertisment. I didn't go buy a coke because I saw Tila Tiquila drink one while she was sittin around her puter with her myspace going. I drank one cause it was in the fridge. That my friend means COLD coke! When you log in REALLY, e-mail, Cupid, mySpace, EveryonesPace(Like myspace but allows Nudity all over), Do you honestly look at said advertisements if you just have to see if that gurl, that guy, that friends from Highschool, just got wind of your page, and calls you from italy. Hey I am in Italy, I am makin Madd Money over here come over for 3 weeks I will put you up, and it's a vaction!!!! Hellz No you are there for that not the Advertisement!! The only thing Spam means to me is it's in the can or in the Blocklist. I could care less that Bill is retiring, the only thing that shows is that he lacks the Knowledge to retire 3 yrs ago, and maybe he wouldn't have to be working with his wife now. I believe they created a Visa for him, because he has sooo freakin much he has no time to figure out what to do with it!! I would wipe my As* with a hundred one time just because I could, just once. That my friend is way to much money but Damn he made it. Just like the founders of myspace. Now there is somone wanting to tear it to peices. Figures You can't build something where in a few years someone wants to tear it down. My friend id on myspace is 53683244, SugarBear sugarbear110@hotmail.com . That's how you find us over there in myspace. Add me or just take a look at my page it is no big deal. I write, I check mail, and I find people with my intrests, FREE! You don't get free on porn sites!! All of this vast information, at your finger tipps and we use it to surf porn!! But last and certainly not least, It's all a big deal to me.
Now with that said let's try and change the topic, I propose that we end world hunger. Feed the Homeless to the Hungry!!! That is a very good plan, kill 2 birds with one huge stone!!! And I Kevin Kling have thought of it!!! Where's my check, I want residual!!!!
Trent - I think your article is awesome. I have been disgusted by MySpace since its inception and thank you for illuminating the corrupt nature of the site. I find it so sad that so many people are not bothered by the drastic influx of invasive marketing the site has generated. Then again, this is America where consumerism reigns supreme.
Regardless, I don't really get too involved the history of company's like myspace.
Hmm. This seesm to be a recurring issue... "retarted," "fell," now "company's."
Oops.
In the author's defense, I found the article somewhat informative. If nothing else, it provides a launch point for those who haven't been paying attention.
Personally, I use Myspace as an RP place. I really don't care about the political and economic crap behind it. I've never caught anything from it... besides that one case of Writer's Block that Lois Lane gave me... but that's another story. I think that the kid who wrote it is only looking at one facet of Myspace. Yeah, it's got ads up the... but that just keeps it free.
Plus, my computer's net is slow... those ads (at least the interactive ones), keep me preoccupied as I'm waiting for the pages to load (I mean, c'mon, I get to shoot things as I wait to RP. Fun, ne?) I have popup blocker, so I don't get any of the ad links. So where's the harm?
I have about a dozen different accounts (sharing with other people, too... different characters). Each one is a different character, from various different fandoms. Star Trek, X-Men, LotR, Superman.... I'm there for the RolePlay, and even my Emails connected to them are character based. So I don't see the problem with a few advertisements (Or a billion, in the case of Myspace). As long as I don't have to pay for my accounts.
Just thought I'd speak out for the other types of 'Spacers. Since thus far, all the comments were about the RL ones. There are other types of people MYspacing... And I figured it best to hear from the other sides.... ::Smirks:: If you don't like my opinion, then yet another thing to comment on, either way, ne?
Was anyone else actually able to get through Sugarbear722's post? It was long, and clearly passionate, but in the end I felt like I'd just been yelled at in another language...what was that about Bill Gates inviting me to Italy?
Arafelis said:
Hmm. This seesm to be a recurring issue... "retarted," "fell," now "company's."
I guess i did F up, and dammit i tried so hard not too. Anyhow, it's seems and not seesm. :)
for what it's worth, i like the concluding paragraph:
"What truly remains to be seen is not the repercussions of misleading PR campaigns or bad business deals, but whether MySpace teens will fall victim like Narcissus to the worship and distortion of their own (and others') online reflections, or if they will lead the way in navigating a new world comprised of Super Publics, where old cultures collide, and new cultures are born."
like it or not, MySpace primed the social networking market and it's here to stay, for a while. i hope people leverage this for the common good.
My first thought on myspaces's "The Black Carpet" was hey that's a pretty nice way to generate a lot of hype for a movie, see "Snakes on Plane", but this new play by myspace goes way beyond your typical viral marketing. This is Email Marketing 2.0.
Why stop at "The Black Carpet' for movies. Why not extend it, how about "The Reader's Edge" for new book releases, advertisers such as Barnes's and Noble would jump on this. Or how about "The Gadget Movement" where people get special myspace offers at the nearest Best Buys.
So you can see where this is going, it's going big and if myspace does it right it's going to rock the industry and change the landscape of internet marketing from this point forward.
my full article on how myspace is becoming email marketing 2.0 is at:
http://webpodge.com/2006/09/18/myspaces-the-black-carpet-i...
When was this article published? Judging by the comments recently but this story is old news. In any case its classic tech startup. Start small and shady, take someone elses ideas and make them better.
Davinci said "Good artists copy, great artists steal" which still holds its weight today.
I think the author is making a point you're all not seeing. MySpace was created under a guise, much like the concept of 'social networking' which is in fact a marketing tool. People in the US are so blind to this stuff that he is enabling some folks - those willing to read it - to take a step back and realize how 'buy buy buy' focused our society is. As a result, we handed over cash to flush our culture, if any, down the toilet. Myspace isn't bad per se' its your 'wolf in sheeps' clothing.
I could not have put it better myself!!!
Reading this article is like being confused, and then entering a moment of clarity. I have been an observer of myspace for at least 2-3 years now. And I have been on friendster prior to myspace, at a friends request.
But the current state of the media makes it impossible to know the truth. Still I would have to say, this article answers the most importent questions... and leaves the least amount of questions unanswered.
I never thought I would be this old, but I have to say "I am ashamed at what the world has become!". Maybe I am just old. Or maybe I am just smarter now. But it just really sucks!!!
Excellent Read !!! You should get together with MySpaceScams
"Lapinski is a freelance writer who resides in Orange County. He is also a starving college student."
Everyone please send Trent some food. :)
Despite what many people have commented in response to this post, I do receive actual e-mail SPAM in result of MySpace. While I do not believe MySpace to be behind the e-mail SPAM, it is extremely annoying! My favorite method of to deter these people (although I'm sure it's completely ineffective) is document on this page...
[theexploitedmind.com]
A love letter back to the SPAMer from a 14 year old (according to the love letter). Classic!
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