Facebook and MySpace: The Importance of Social Networks

In the mid-to late-2000s, Facebook and MySpace competed to be the leading social networking destinations on the Internet. Chris De Wolfe and Tom Anderson launched MySpace in August 2003, originally conceiving the site as a way for friends and fans to connect with one another as well as with their favorite bands and artists.1 Founder Mark Zuckerberg launched Facebook about six months later, in February 2004, and though it initially grew more slowly than MySpace, it soon shot past MySpace with a spate of key innovations. In fact, in 2006, MySpace controlled 80 percent of the weekly share of visits to social networking sites in the United States, compared to less than 10 percent for Facebook. Yet today, Facebook has attracted over 1.3 billion users — one-fifth of the world’s population — becoming the busiest and most-visited website on Earth. MySpace has clearly been eclipsed by a rival that Rupert Murdoch (whose News Corporation acquired MySpace in August 2005) once dismissed as “a communications utility.”2 With social networking now the most popular activity on the Internet, this case illustrates the importance of social media to the modern economy and explains how Facebook beat MySpace to become the most popular social media destination on the Internet.