Overview, Background and Situation Analysis
In 2006 news all over the media concerning MySpace would reveal countless headlines about high profile predator related cases. Chatfield (2007) says that in February of 2006 the first federal sex crime charges related to MySpace was filed relating to two separate cases. During that period MySpace fostered a fair amount of controversy regarding the safety of its users. Chatfield (2007) indicated that being one of the largest social networks on the internet, MySpace acted as the face for an entire social movement and when concerns regarding safety online were raised, MySpace was among the first to be targeted. Because of news reports on these and other cases to follow, the visceral reaction of law enforcement and media alike was quick and harsh against MySpace and its security precautions (Chatfield, 2007).
MySpace had grown so fast and so popular that by the time the stories started breaking, there was fervor of attention regarding how much attention was required in this area of social networking. Chatfield (2007) says that because of the heinous nature of these crimes and the monumental danger they represented, the media overlooked many other aspects that deserved an equal measure of attention. As MySpace started stepping up to take control of the vast security flaws and holes that were garnering so much attention, media coverage started to expand to cover other aspects of the site that were also problematic.
The media continued to draw significant attention to MySpace and the dangers it presented, pushing the matter further into 2006. Chatfield (2007) indicated that no ones argue the dangers present on MySpace and other social networks. As a result it was argued that the nature of MySpace offered sexual predator’s unauthorized access to potential victims in manners never before dealt with by law enforcement. It was however noted that the degree of risk attributed to children when they are online was arguable when measured against the amount of media coverage it had drawn during that time (Chatfield, 2007).
Additional security concerns included threats to emotional security or the possibility that unknown persons could misrepresent them online through MySpace. Agosto & Abbas (2011) indicated that two of the boys who had their MySpace accounts hacked and one was visibly upset as he told the story of a hacker posting racist message on his profile to it look as if he and posted it himself. He then switched his social networking home base to Facebook which he perceived safer. He said that the recent decline in teen MySpace use to security flaws. For MySpace protecting online information privacy and security was a balancing act.
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Why MySpace did not Succeed
MySpace posed many privacy risks for its users ranging from unauthorized use of their information by government agencies and businesses to attacks by hackers, phishes and data miners. Trepte (2008) says that the risks associated with MySpace resulted from harmful activities by other users such as cyber stalking, harassment and reputation damage. The situation of MySpace was aggravated by insufficient, sloppy and misleading privacy practices in online social networks which had been criticized.
In addition, Trepte (2008) also says that MySpace which by 2006 was the largest social network before been overtaken by Facebook was known for its cumbersome and confusing privacy features and its invasive and deceptive practices. According to Trepte (2008), the default setting for its privacy features was usually at the lowest, most open level and opt- out procedures were burdensome and convoluted which meant that users were supposed to be very proactive if they wanted to protect their privacy effectively. During the same period it was noted that MySpace was having problems with cyber-vandals also known as trolls who were attacking a number of MySpace groups with offensive comments and photographs. The targeted groups in this type of attack included those dedicated to such interests as home beer brewing, animal welfare and gay rights issues.
According to Bahareth (2012), in 2006, MySpace was rated as the most popular social networking site in the United States. It maintained its number one position in 2007 but in 2008 it was replaced by Facebook. The rating was given based on unique monthly visitors at the site. Bahareth (2012) says that by 2009, there were 1,000 employees who were working at MySpace but 30% of who were released in June the same year. After so many highs, low were inevitable and it happened to MySpace when the social networking site started losing its membership. This was attributed due to lack of innovation and reaching saturated state in terms of new developments did not help MySpace. Bahareth (2012) continues to indicate that “MySpace’s strategy of being a music and entertainment centered social network site and a portal like feel was some of the reasons of its decline during that period” (p. 138).
Another cause of MySpace failures was as a result of its complex design with many advertisements. This was $900 million deal with Google which lasted for three years. Through this deal MySpace was forced to show more number of advertisements on the site which made it very congested looking site and there was no space left for any new innovative features on the site page. In this context it was evident that if the company was to minimize the advertisements its revenue generation would fall. At this point Facebook edged MySpace by giving fresh features to users. Because of MySpace’s inability to improve with time, a large number of MySpace users aged 18 to 24 migrated to Facebook (Bahareth, 2012).
Definition of Product
MySpace as a product offers several features which include personal profiles, establishing connections, joining groups, communication among connections, information search, UCC sharing and expressing opinions. Under the leadership of DeWolfe, MySpace developed significantly since its launch in 2003 with the average of 300,000 additional users signing up on everyday basis. Bahareth (2012) says that the unique features of MySpace was its capability of integrating blogs, web profiles, classified listings, photo galleries, entertainment content as well as user forums.
MySpace also developed a community where users were able to do everything from planning their weekends to connecting up with their friends along with discovering new music (Bahareth, 2012). Through this product, above seventy million people in the United States visited the website each month, which created a user composition of politicians, filmmakers, comedians, bands, photographers, and several other people who want to communicate with friend along with planning their social lives (Bahareth, 2012).
Moreover, Sankar & Bouchard (2009) argues that the product rivalry between MySpace and other social network sites was not only restricted to acquiring users across the world but it also extended to architecture, platform and site design. MySpace went through a user interface redesign that extended from navigation to search to home page to editing. This was a direct response to the growing sophistication of Facebook. Sankar & Bouchard (2009) says that usability, ease of community building, and global audience were all major themes for the redesign of MySpace. Through this redesign, MySpace got real homepage capabilities where one could add a background and change the layout. Another unique characteristic was that MySpace also had an application development model consisting of application profile, a canvas, modules and home page (Sankar & Bouchard, 2009).
MySpace unique features included a cohesive data accessibility policy that respected privacy as well as secure access based on open standards such as AOuth. Sankar & Bouchard (2009) says that mechanisms such as access delegation based on access tokens made it easy for users to provide restricted, temporal access to pieces of information while keeping all data secure and private.
According to 2010 statistics, Facebook had more than 500 million active users. MySpace had more than 122 million. Traffic at the Twitter Web site increased from 2.5 million tweets a day in 2009 to almost 50 million by February 2010. Facebook has the highest combination with other social web sites (Bahareth, 2012). This is because whereas Facebook aims to foster friendship, LinkedIn aims to foster business collaborations. Bahareth (2012) says that this implies that we can combine the business information about a user with the more personal, private information they may provide on the friendship site. The growth of social websites can be depicted in the table below.
Estimated number of users (Million)
In the Alexia ranking that came out on April 19 2008, Facebook edged MySpace in the race of rankings but it was just a start of the social network’s sites decline (Bahareth, 2012). The lowest point for MySpace came in June 2010 when it was ranked at number 80 while competitors such as Facebook were sitting at position two. Because of MySpace’s new strategy of developing MySpace as a social entertainment website rather than as a social networking website the social network site further declined. Competition was stiff when MySpace started focusing more on entertainment stuffs like movies, music and celebrities to mould it into a new genre and a fun site (Bahareth, 2012).
In their attempt to offer competitive products to the market, MySpace joined hands with Facebook which enabled artists like musicians, singers and bands to manage their Facebook profile while on MySpace. Bahareth (2012) further mentioned that during March 2011, comScore published another market research results for website in relation to which in January and February 2011 about 10 million users left MySpace (Bahareth, 2012). MySpace unique user’s numbers declined from 95 million to 63 million in that period. Bahareth (2012) argues that the largest reduction in unique visitors was noted in February 2011 at 37.7 million with fall of 44% in relation with the 2010 calculations.
The target market of MySpace was teens and young adults who used MySpace to trade messages, photos, music and blogs. Despite its criticism, MySpace appears to have led for the long term forcing media companies and advertisers to take notice (Ferrell & Hartline, 2010). The demographic profile of MySpace is lucrative. MySpace audience is basically in the 12 to 17 age range. The target market for its competitors such as Facebook is 25 and over crowd while LinkedIn has a different profile of over 30 million members with an average age of 41. Through its target market MySpace revamped its music service to allow users to play songs for free, create playlists and purchase music through Amazon (Ferrell & Hartline, 2010).
Product demand, forecast of market share Internal Analysis
Strength and Weaknesses of MySpace
One of the major strengths of MySpace was the website design and layout. The home page of MySpace was redesigned and some extra features of applications, status updater and subscription were added. Bahareth (2012) says that the music application of MySpace was redesigned to make look like a music store. Another basis of its strength is that MySpace created international site options for users to use their own language which was launched in 2006 (Bahareth, 2012).
Sickels (2008) says that MySpace’s background colors, photos and videos and how the social networking site varied from the standard format all contributed to the strength of MySpace. The strength of MySpace is it was regarded as a promotional tool over a standalone website with the capability of creating networks that enhance production and promotion. Research shows that most social interaction involved music and the social interaction on MySpace was not different. Sickels (2008) says that anther strength of MySpace is that it represented a new system for hanging out and hooking up, activities in which music has an important role. MySpace also enabled users to integrate their MySpace activity to their Twitter and Facebook accounts in order to attract and show others that they re still on MySpace and to bring users back to MySpace.
The main weakness of MySpace was the lack of management expertise to help the company meet the challenges of rapid growth. MySpace lacked technological knowhow and the aggressive and innovative culture. Another weakness of MySpace was spending more cash than it was bringing in. Another weakness was threat from substitute products which adversely affected MySpace’s revenue in the long run. Rivalry among MySpace competitors was a major challenge. Competitors such Facebook posed a major challenge to MySpace because of their strategic focus and product differentiation.
Core Competencies and Competitive Advantages
MySpace core-competence is based on differentiation strategy. Daft & Marcic (2010) indicated that MySpace distinguished it services from other players in the social network by introducing music store were users could play and create playlists in the website. MySpace uses creative advertising, distinctive product features, exceptional service and new technologies to achieve a product perceived to be unique. Daft & Marcic (2010) says that MySpace’s differentiation strategy reduces rivalry with competitors because its users are loyal the brand. The differentiation strategy of MySpace enables the company to fight threats of substitute products.
MySpace also uses the focus strategy to concentrate on a specific target market. Through this core-competence MySpace is able to focus on leveraging and developing more from the firms existing capabilities and core competencies. Through this the company has been able to maintain a competitive advantage. MySpace competitive challenges in United States and international operations contributed to the difficult decision to reduce the company’s work force partly with the aim of operating more efficiently.
In order to gain competitive advantage, MySpace should adopt a market driven development. Daft & Marcic (2010) says that market driven development implies being responsive to the needs of customers and the market rather than telling the market what is possible. Financial management at MySpace is important for the growth of the company. MySpace should focus on internal innovation which will involve collaboration with other technology companies such as Twitter and Microsoft so as to enter in new areas of business (Daft & Marcic, 2010). The growth social networking is driving and supporting the move towards partnership thinking. Social networking provides the ability to rapidly and smoothly conduct transactions, communicate information, exchange ideas and collaborate on complex projects via social networks (Daft & Marcic, 2010).
Management Structure Recommendations
The most appropriate management structure for MySpace is virtual structure. This type of structure eliminates many of the internal boundaries among subsystems and external boundaries with the external environment. Schermerhorn (2010) indicated that this type of management structure is viewed as a combination of the team and network structures. Meetings and information sharing happen continuously. This type of structure will enable MySpace to work together in teams that form and disband as needed. It will provide little hierarchy with lots of empowerment and technology utilization. This type of structure will facilitate knowledge sharing which is an essential component for MySpace (Schermerhorn, 2010). The virtual organization within MySpace will operate through shifting network of alliances that are engaged as needed using IT and the internet. Schermerhorn (2010) says that through virtual organization, MySpace will have an alliance into action to meet specific operating needs and objectives when the work is complete.
Plan for aligning MySpace Situation more with Company Goals
MySpace should build commitment to the strategy. Daft & Marcic (2010) says that people throughout MySpace have to buy into the new strategy. Managers make a deliberate and concentrated effort to bring frontline employee into the loop as they understand the new direction and have a chance to participate in decisions about how it will be implemented. Daft & Marcic (2010) says that MySpace should meet with partners and other stockholders and players to explain the new direction and ask for suggestion and recommendations.
The management at MySpace should devise a clear implementation plan. The managers at MySpace should put forth great effort to formulate a strategy and next to none craft a game plan for its implementation. Without such a plan managers and staff are likely to lose sight of the new strategy when they return to the everyday demands of their jobs. In order to enable successful execution, the strategy should be streamlined so as to break the implementation process into a series of short term actions with a timetable for each step (Daft & Marcic, 2010).
Culture and diversity in this plan should be put into consideration. Daft & Marcic (2010) says that culture drives strategy and without the appropriate cultural values, employees behavior at MySpace will be out of sync with the company desired positing in the marketplace (Daft & Marcic, 2010)
Managers at MySpace should take advantage of employee’s knowledge and skills. Daft & Marcic (2010) says that managers need to get to know their employees on a personal basis so they understand how people can contribute to implementing the strategy. It is important to note that people in MySpace may be having unused talents and skills that might be crucial for the success of the company’s new strategy.
The final aspect of the plan is communication. Daft & Marcic (2010) says that top managers at MySpace should communicate through words and actions. Daft & Marcic (2010) also says that managers have to keep tabs on how things are going, identify problems and keep people informed about the organizational progress. Managers at MySpace should breakdown barriers to effective communication across functional and hierarchical boundaries.
Options of Product Re-design, Test Market and Analysis
MySpace should effectively carry out product re-design. This will involve investing in technological knowhow and adopt an aggressive and innovative culture. This will enable the company to come up with new products that suit the market needs especially with the recent growth of social networks in the market. Another good option for MySpace is partnering with big players such Microsoft, Facebook, Oracle and Google to links for integrating their website with a wide array of applications. The company should invest in management expertise who will formulate new strategies for MySpace and implement them to suit the market needs. New managers with expertise in social networking will enable MySpace to meet challenges as they grow up.
The top management should test new markets by capitalizing on MySpace’s popularity by making it a place for companies to provide services to members. This will be achieved by developing applications that allow members share more features online. Such companies will experience popularity and at the same market their popularity. The fundamental objective of using this type of strategy is to gain strategic competitiveness and earn good returns in revenue.
An effectively formulated strategy will enable MySpace to marshal, integrate and allocate the firms resources, capabilities and competencies so that they can be properly aligned with its external environment. An analysis of the existing strategy of MySpace will help in rationalizing the firm’s vision and mission along with the actions taken to achieve them. Information about a host of variables including markets, customers, technology, worldwide finance, and changing world economy must be collected and analyzed so as to position MySpace in the market and determine which market segments the social network site will focus on.
While focusing on product redesign it is important to deal with the previous flaws associated with privacy and security of member’s information. MySpace should monitor future regulatory political climates or global economic conditions despite the fact that we are in a global marketplace and economy. The differentiation and focus strategy will ensure that the MySpace incorporates innovations and more importantly moves the relationship from the social network point of view to a fully integrated application which revolves around members and users satisfaction. Adopting these strategies will ensure that the company moves to a competitive edge with its competitors such Facebook, Twitter and LinkedIn besides ensuring a more wide global scope market for the company.
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