What Really Killed MySpace, and Why Facebook Will Avoid the Same Fate

In this video, Fool contributor Tim Beyers sits down with Rick Engdahl to talk comics, TV, movies, tech, and related geekery. Tim is a member of the Motley Fool Rule Breakers stock-picking team, as well as the real-money Motley Fool Supernova Odyssey I growth portfolio.

In this segment, Tim explains the differences between Facebook's (NASDAQ: FB  ) position today and the MySpace of 10 years ago -- as well as the pre-Google (NASDAQ: GOOGL  ) YouTube -- and how requiring real identities has made a difference.

A full transcript follows the video.

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Richard Engdahl: If you pulled the plug on Facebook overnight, the world would scream. If you slowly faded Facebook out over five years, I'm not so sure.

Tim Beyers: You could be right about that, because that's certainly what happened to MySpace. Had you pulled the plug on MySpace 10 years ago, the world would have screamed bloody murder.

Engdahl: I don't compare the two. I think MySpace was ... that was the early days. It was a much different scenario than Facebook today, obviously.

Beyers: Sure. But I do think it's ... in one way, Google is playing catch-up to Facebook. It's easy to forget that Google didn't always require you to be who you were -- like on YouTube. The real reason that Google+ is now being so closely integrated into YouTube ...

First, is to more tightly integrate YouTube with the Google experience; I think that's primary. But secondary, and not at all -- it's something we should consider, but not overvalue -- is that YouTube used to be a place where, man, the level of spite in YouTube comments used to be just epic, and the reason was you could be anonymous. That was the problem with MySpace.

You know who solved the MySpace problem, was Facebook, because you had to be who you were. You couldn't be anonymous on Facebook, and that just changed everything. It was a very rule-breaking idea.

Now Facebook has other things it needs to fix, but since you can be reasonably assured that most people who are on Facebook are who they say they are -- because they do have to verify themselves and put a picture up -- Facebook is, principally, about people who are real, rather than random online identities.

That's saying something. That still has some value, but at Facebook's current valuation it's not enough to carry it all the way, but it is something of note, in an area where Google has had to play a little bit of catch-up.


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