Rupert Murdoch wants his myspace.com

By Published on .

Meet the guys behind MySpace.com. Their social-networking company was sold by parent Intermix to Rupert Murdoch for $580 million, and now they're starting to transform his old media empire into an MTV-esque draw for the Web generation.

Like their new owner, these guys believe in a multimedia approach to empire building. And thanks to Mr. Murdoch's deep pockets, they are already set to roll out MySpace Records and a MySpace satellite-radio channel. After those are established, they plan to use the MySpace brand for a mobile service, a fashion brand and, as for Hollywood, yup, they'll be making movies, baby.

All about the music

MySpace's president is Tom Anderson, 29, a casual dresser even by Internet standards in artfully ripped jeans and an L.A. Dodgers cap. He's joined by the equally laid-back 32-year-old Senior VP-Sales Colin Digiaro. The grizzled old man of the group is anything but; CEO Chris DeWolfe is a slender 39-year-old, albeit with a crop of wavy, graying hair.

Job No. 1 is to exploit the music centerpiece of their Los Angeles-based site. MySpace has inked a deal with a major record label that it won't name (smart money is on Universal Music Group) to start MySpace Records later this fall. The team is also in serious (wink, wink) talks with an unnamed satellite radio company to launch a MySpace channel in the next few months.

The idea is to expand the MySpace brand-rated No. 4 among member communities online, according to Nielsen/NetRatings, and which draws an "Adult Swim"-watching, indie music-listening audience-into products its users will want and endorse.

"There hasn't been a Web site that has established itself as a lifestyle brand," Mr. DeWolfe said.

Both the music label and radio channel will be stand-alone, offline units of MySpace, not download services, according to Mr. DeWolfe, though the record label plans to showcase new talent through the site and test their popularity there. The radio channel will be a combination of talk and music, and will look to its user base for its on-air talent.

With half a million bands featured on MySpace, music is a conversation-starter, a way for users to find common interests. MySpace is also a key online venue where artists at all levels promote their work, Mr. DeWolfe said, noting that REM launched its album "Around the Sun," exclusively on MySpace.

Plus, its 32 million members make up a substantial mass audience, Mr. Anderson said. And because users spend so much time chatting among themselves, reviews spread virally very fast. Some 12% of the U.S. online population in August visited MySpace, according to Nielsen/NetRatings.

How is any of this helping Mr. Murdoch's Internet ambitions? Mr. DeWolfe points to some alignments already happening. Fox's TV show "The Family Guy"-a favorite show among MySpace members-will be the subject of made-for-the-Web vignettes this fall. His new boss "sees MySpace as a great content distribution tool." Members, however, may resent anything that feels like it's being promoted just for the sake of a corporate parent.

It may be financially tempting for News Corp. to migrate its TV content to online, where content can command four to five times higher CPMs. But buyers may balk at paying more for the same number of impressions. "It'll be difficult to grow the business meaningfully that way because at the end of the day that money is coming from client budgets," said Jason Maltby, managing partner, Mindshare.

Ross Levinsohn, News Corp.'s newly appointed president of Fox Interactive Media earlier told Advertising Age that merely throwing old media content on MySpace is not going to work. "We need to do a quantum amount of work beyond just repurposing content from traditional to Web to make it interesting to the consumer," he said.

MySpace advertisers that could follow it offline include McDonald's, Procter & Gamble Co.'s Old Spice, Verizon, Circuit City and Lion's Gate Entertainment.

Mr. DeWolfe and Mr. Anderson started MySpace two years ago with backing from Intermix. Their plans have always included expanding offline once MySpace was established as a "next generation Web portal," Mr. DeWolfe said. But the News Corp. cash infusion has fast-tracked plans. Its new owner also gives MySpace international reach. A London office will open by the end of the year to better serve the 800,000 British members. Plans for the mobile service include allowing members to get MySpace messages on cellphones, and a film application that lets film makers upload their work. Long term, these original movies will form the basis of MySpace Film.

MySpace's secret sauce is that it has so many ways for users to personalize their profiles. Besides music picks, members can create blogs, post photos or use a classified section ("that rivals Craigslist," said Mr. DeWolfe). "It has become part of the fabric of their life," Mr. DeWolfe said.

News Corp. wants its old media to emulate MySpace's model. "If we can enable the MySpace model across properties, that's terrific," Mr. Levinsohn said. "But [consumers] are not going to listen to me, they are going to tell me. We have 30 million trend and style opinion-makers."

In this article:
Most Popular