MySpace Has to Facebook the Music

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Facebook founder Mark Zuckerberg probably grew tired of being at the end of alphabetical roll calls growing up. Now he's finally in first place.

Facebook has passed News Corp.'s (NYSE: NWS) MySpace domestically in traffic. TechCrunch is leaning on a comScore report that finds Facebook attracting 70.278 million unique visitors in the United States last month. MySpace lost the gold medal by just a hair, with 70.255 million unique visitors.

The difference isn't as close as it seems, though. Facebook is the social-networking site with momentum. It tacked on another 2.8 million visitors during the month, while MySpace's stateside audience fell by 0.7 million users. Other traffic-monitoring sites, including Compete.com and Amazon.com's (Nasdaq: AMZN) Alexa.com, had already handed the crown to Facebook earlier this year, most notably overseas, where Facebook had already long passed MySpace.

If you're MySpace, how do you get your groove back? If you're Facebook, how do you make sure you keep growing?

MySpace has its strengths, primarily as a social-networking site for artists, including musicians and comedians. And naturally, most sites would also be envious of drawing more than 70 million unique monthly visitors in this country. The site just has to make sure it doesn't keep shrinking. A continued decline would come at a devastating time for MySpace, which is approaching the end of its three-year, $900 million paid-search deal with Google (Nasdaq: GOOG).  

Facebook can't get too cocky, though. History and logic dictate that Facebook will eventually overstay its Web 2.0 welcome. Just as sites such as Friendster peaked too soon and United Online's (Nasdaq: UNTD) Classmates.com arrived early but failed to connect the social-networking dots, there's always the possibility that someone will build a better mousetrap.

Now, that doesn't mean Zuckerberg should start handing out bidding cards to Google, Yahoo! (Nasdaq: YHOO), and minority stakeholder Microsoft (Nasdaq: MSFT). He also has to realize that for now, things are looking up, and that News Corp.'s shot at unloading MySpace for billions is probably shot.

Facebook deserves the pole position. It has been an innovator in opening its platform and has resisted the ad-blitz trap that transformed MySpace into a gaudy sensory overload. However, blue ribbons are sadly temporary in this Web 2.0 world. Facebook is blazing now, but it will never be able to stop running.

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Google is a Motley Fool Rule Breakers recommendation. Amazon.com is a Motley Fool Stock Advisor selection. Microsoft is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz remembers when social networks were an offline endeavor. He owns no shares in any of the companies in this story and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 16, 2009, at 2:04 PM, mayhem4masses wrote:

    I gave up on myspace more then a year ago, facebook is just a far superior website. I still log onto my myspace account now and then, but I spend a fraction of the time on myspace that I spend on facebook. The amount of pageviews facebook receieves is 3 to 1 in comparison to myspace. facebook ranks as the 4th most pageviews website in America according to alexa.com and myspace is ranks in 11th place. Sad, I checked alexa.com rankings 2 years ago and myspace was 3rd only to yahoo and google, it has lost much of its popularity.

  • Report this Comment On June 17, 2009, at 3:32 AM, esxokm wrote:

    Sure, Zuckerberg could probably get a better price later on, when the economy picks up, but if I were him, I would cash out of Facebook ASAP. Like you say, the site will probably go the way of MySpace eventually. Just take the money now and reinvest in other ventures...

  • Report this Comment On June 17, 2009, at 10:43 AM, plange01 wrote:

    myspace and facebook missed their time to go public and are now mostly worthless...

  • Report this Comment On June 17, 2009, at 2:24 PM, esxokm wrote:

    Plange01:

    It's true. Doing an IPO now would be tough. But what about a private transaction with a major media company? Even if Zuckerberg didn't get exactly what he wanted, he'd still get multiple millions of dollars.

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