Suddenly, an Affinity for Teenagers
Suddenly, an Affinity for Teenagers
October 17, 2005
WHAT has more page-views than Google and more members than AOL, and recently acquired a rich, doting relative named Rupert? With his acquisition of MySpace.com, a social network used by 33 million young people, Mr. Murdoch has become the dad at the teenagers' party, working hard to fit in.
Louis Lanzano/Bloomberg News
Rupert Murdoch is chairman of the News Corporation.
Media and tech companies have spent a lot of time in the last few months either preparing for a hybrid future or vamping for Wall Street, depending on your level of cynicism. Tech companies want to be seen as media companies - Yahoo, Google - and media companies want to be seen as Web players - Comcast, the News Corporation. Perhaps as a practical matter they have no choice but to move toward each other.
With content atomizing into digital bits that can be delivered through all sorts of pipes (and wirelessly to boot), the line between those who make stuff and those who deliver it is bound to shred.
Still, many smart players have fallen into the intermediate chasm: Time Warner almost tipped over trying to take advantage of digital valuations by teaming with AOL, and Microsoft's bold efforts to come up with its own content have come mostly to naught. But sitting still seems like a nonoption, which may be why Mr. Murdoch formed the Fox Interactive division last summer and started speed-dating with Web sites.
In addition to MySpace, the News Corporation bought IGN Entertainment, which runs Web sites that sell video games and other types of entertainment (one of its properties, Rotten Tomatoes, is a competitor to Moviefone on AOL), and Scout Media, which runs the sports-oriented site Scout.com. After staying on the sidelines through much of the digital boom and subsequent bust, Mr. Murdoch is hitting the buy button on several fairly expensive purchases, most of them with significant penetration among young Web surfers.
IT is an aggressive, intrepid play - no news there: this is Rupert, after all - but the strategy is as much defense as vision. As digital companies attempt to shift the paradigm of how media is consumed, Mr. Murdoch wants t0 make sure he brings more than legacy media to the party.
"Rupert Murdoch is really good at thinking three to five years out. That is his forte," said Richard Bilotti, a managing director and media analyst at Morgan Stanley. "In the case of MySpace, this could do for his Internet strategy what 'The Simpsons' did for the Fox Network by creating enormous visibility."
MySpace may be the most interesting acquisition, because it is such a long walk from the News Corporation's core business. Sure, the company goes after young people with Fox TV, but in this community site, the users program their own universe. At $580 million, the two-year-old site was hardly a bargain, and the content - mostly posted by lovesick or love-obsessed teenagers - would hardly seem worth the price.
But MySpace has shown an explosive ability to reach young people, exhibiting the growth characteristics of the average adolescent by adding four million members a month. In doing so, MySpace has found a rare route to a very hard-to-reach audience. With TV audiences shrinking, radio dispersing and magazines attenuating, marketers are frantic to get their messages to teenagers.
And teenagers form an addictive relationship with MySpace, spending hours doting on their own pages and following links wherever they might lead. And they must spend time clicking on the ads that pepper the site - membership is free, and the business is built on advertising revenues - or the likes of Mr. Murdoch would not be much interested.
Many of the pages bear the hallmarks of a teenager's bedroom: they are messy, much-decorated and full of slavish devotion to the current heartthrob or the would-be rock star a few pages away. They offer a clear and bracing look into the mind of the average American teenager.
To be sure, there are older users as well, with a variety of interests - the "Religion and Beliefs" section has more discussion groups than "Romance and Relationships" - but much of MySpace does not feature the kind of content that would seem to make a big media company swoon. Still, Mr. Murdoch, who waited to jump in, is not in a picky mood.
MySpace is like an oven that supplies its own food: users post blogs, profiles and pictures that other users consume, no professional content-makers required. This particular community, however articulate, has shown real power. Bands, including Depeche Mode, Nine Inch Nails and Weezer, have used its member base to introduce albums.
In an earnings call last summer, Mr. Murdoch told analysts that My- Space is "sticky, fun and poised to be profitable."
Tom Anderson and Chris DeWolfe, who worked on a variety of digital endeavors in Los Angeles, conceived MySpace as a band-centric site. They told a few friends, who invited a few friends to join, who then invited their friends. But the Web is only viral if something is worth passing along. MySpace riveted users not by a single killer application, but by blending utilities in a single package.
The site combines the social networking of Friendster, the photo posting of Flickr, the invitation function of Evite, the classifieds of Craig's List, the brutal measurement of Hot or Not and the dating possibilities of Match.com. Users relentlessly check their rankings - the most-searched guys and gals, based almost exclusively on their photos - to see how many new friends they have made and where they rate in the digital clubhouse. The site is a testament to the power of small affinity groups, which can scale pretty quickly once everyone is on the same network.
"MySpace has done a fabulous job of unlocking the power of the Internet along multiple lines," said Ken Marlin of Marlin & Associates, a boutique investment bank focused on technology and media.
Like a lot of Internet sites, the tang of sex bubbles along under the surface. Many of the posted photos feature come-hither poses and not much clothing, and the posted commentary can veer from prissy to randy in a hot second. (The 25 top-ranked women in terms of searches look like an audition for the opening of a Hooters restaurant, and pornography has been known to hit the site, only to be hastily removed.)
But the site's users - among them my 17-year-old daughter - cannot hit the pillow without a little quality time on MySpace - say that the prurience is nothing more than a distraction from the primary activity, which is giving shout-outs to the friends you have and using the site's software to make new ones.
"We have become an atomized, alienated culture, and what people are looking for is a sense of community," said Jesse Kornbluth, former editorial director of AOL and now the editor of HeadButler.com, a Web-based culture service. "Part of the attraction of the online community is that it is the place where the nerd can get the girl. In no other space does the witty, chess-playing nerd trump the football captain."
But if the Web is the great enabler and leveler, MySpace can still feel a lot like the high school cafeteria. Scores are settled, breakups are announced, and the cool kids still only talk to one another.
"We are endlessly fascinated with each other, almost as much as we are fascinated by ourselves," said Paul Saffo, a strategist at the Institute for the Future in Palo Alto, Calif. He pointed out that back in the mid-1980's, very early in the life of the Internet, something called The Well, a literary chat room and forum, blossomed. Almost as soon as there was an online world, there was a community that wanted to build a campfire there.
"But that early promise of an expansive and idealistic vision of cyberspace has ended up in a kind cyburbia, a vast, bland wasteland of people looking at pictures of each other and pictures of starlets," he said.
For the time being, News Corporation has found an elusive audience that is growing more indifferent to television - Where are they all? On the phone? Gaming? I.M.-ing? - and would not read a newspaper if it would end world hunger.
But one problem of finding a way to reach fickle, trend-obsessed young people is that they are fickle and trend-obsessed. Someone could blow a whistle or give a little secret sign and what has become ubiquitous could become passé in a hurry. As anyone who attended high school can tell you, popularity is an ineffable thing that requires cunning and attention to maintain.