MySpace’s death spiral: insiders say it’s due to bets on Los Angeles and Microsoft

I’ve been watching the death spiral MySpace is in for a while. Back in December I interviewed CEO Mike Jones onstage at LeWeb. Back then I thought maybe MySpace could pull it out, but since then I’ve learned the MySpace “plane” that’s in a death spiral has increased its velocity — in the wrong direction.

Since talking with Mike in December I’ve been asking people involved what went wrong and two common themes have evolved:

1. Their bet on Microsoft technology doomed them for a variety of reasons.
2. Their bet on Los Angeles accentuated the problems with betting on Microsoft.

Let me explain.

The problem was, as Myspace started losing to Facebook, they knew they needed to make major changes. But they didn’t have the programming talent to really make huge changes and the infrastructure they bet on made it both tougher to change, because it isn’t set up to do the scale of 100 million users it needed to, and tougher to hire really great entrepreneurial programmers who could rebuild the site to do interesting stuff.

Here, let’s go back and watch the video with YFrog’s CEO, Jack Levin. He was one of Google’s first infrastructure employees. Now, consider that Silicon Valley has lots of talent like him. Think about the technology he knows. Hint, it isn’t Microsoft. Microsoft’s technology just isn’t used by many serious web companies that I know. Stack Exchange and PlentyOfFish are two notable exceptions and neither is located in Silicon Valley and they hardly are companies with the scale of MySpace used to have (more than 50 million users).

Workers inside MySpace tell me that this infrastructure, which they say has “hundreds of hacks to make it scale that no one wants to touch” is hamstringing their ability to really compete.

For instance, I asked why MySpace didn’t really do anything great with all the Facebook likes I’ve put into that system (that’s a new feature MySpace added late last year, but it doesn’t seem to work very well). Or, when I asked Mike about how he was going to do something like Aweditorium did, he didn’t have a good answer. They answered with the cameras off: they can’t change their technology to really make new features work or make dramatically new experiences like the one that Aweditorium brought to the iPad. And now that they have laid off a lot of people morale is down and hiring is very tough for them, they tell me.

Which gets me to the Los Angeles issue. There just aren’t “web scale” companies down in Los Angeles, and because Los Angeles is such a large place — it can take hours to drive across the city — there isn’t a single neighborhood that has built up a good talent base, the way Palo Alto or South of Market in San Francisco has.

This bet on Los Angeles doomed MySpace when Facebook came along. Facebook has hired tons of talent from Google and other companies. This expertise helped Facebook not only keep up with scale, but add new features. Just today the QA team at Facebook shipped a cool new feature.

In Silicon Valley company managers, investors, and others have noticed these two things and are actively betting against both. This will make it tough for Microsoft to get its cloud computing strategy to work and will be tough for tech companies (and money) to locate in Los Angeles. It wasn’t lost on me that yesterday when I was at Y Combinator several of the folks involved there bragged that Ashton Kutcher visited the headquarters a few weeks ago.

I remember back when I worked at Microsoft that folks in the evangelism department bragged that they got MySpace to switch to Microsoft technologies like ASP.NET (MySpace used to be on ColdFusion which was an even worse technology bet and was creaking all over the place). Facebook, meanwhile, had made bets on LAMP (Linux, Apache, MySQL, PHP) and that let them hire quicker and find people who knew how to scale that stuff up big time.

Interesting lessons to watch. What decisions has your company made to accelerate innovation or doom it?

About Robert Scoble

As Startup Liaison for Rackspace, the Open Cloud Computing Company, I travel the world with Rocky Barbanica looking for what's happening on the bleeding edge of technology and report that here.

95 thoughts on “MySpace’s death spiral: insiders say it’s due to bets on Los Angeles and Microsoft

  1. Mr. Scobleizer,

    Such analysis will attract readers in short term, but over time your credibility will be gone.
    And since this is a blog and not news reporting, answers like “all I am saying is that somebody from MySpace told me so” are unacceptable.
    Please think more before writing such things.

  2. Interesting article, but it doesn’t seem to consider a lack of vision – strategic direction (call it what you will) – as being a problem. Not a lot of point having the right technology or even the right people if you don’t know what you’re going to do with it.

  3. Speculation and conjecture. Anyone who was here longer than a couple of years knows more or less exactly what combination of elements lead to our downfall. Hindsight is 20/20 and it was NOT because of the .NET stack — in fact it’s the main thing that kept us going at peak! Whatever technology you’re using doesn’t matter if your processes aren’t in line and the product vision isn’t on track.

    I’m starting to have little hope for this short-term world where business plans and execution are COMPLETELY overlooked in lieu of which tech buzzword/language you’re implementing. FOCUS, people.

    1. Don’t be defensive Rob, it wasn’t your fault, but you have to know in your heart that your peers were totally garbage. Most of the .Net devs in Los Angeles are mediocre financial service types. Not suitable for the fast moving web 2.0 environment. .Net wasn’t the sole problem, and no one said it was. But it was a big factor in the low quality talent pool.

  4. These ARE asinine conclusions, not that such is anything new. MySpace was horrid 1996 all GeoCitiesish when it first started, and never changed, and never had any ‘real-world’ spill-over like Facebook does. Product design, org sructure, spam as an art form, courting garage bands as the ticket, brain drain…long list before you even get to platform or location.

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