With success comes scrutiny, and that's exactly the challenge that News Corp.'s (NYSE:NWS) wildly popular MySpace is up against. The same youthful exuberance that played a part in its runaway success has also turned up some problems that the company's got to work on in order to keep MySpace's image from getting (even more) tarnished.
Horror stories about young teens sexually assaulted by online predators they met through MySpace are plentiful. And then there's the absolutely bizarre story of an American teenager who somehow managed to travel all the way to Jordan to meet a MySpace acquaintance before authorities convinced her to turn back. All these rumors and reports are causing many parents, teachers, and other members of the public to be scared silly about what goes on at MySpace. A 14-year-old girl has even filed a lawsuit against the company, alleging inadequate safety precautions for minors.
The fact's not lost on News Corp. Several months ago, the company hired a former Microsoft (NASDAQ:MSFT) executive to spearhead its online safety efforts, involved itself in a campaign to educate young users on Internet safety, and has now announced what it touts as greater safeguards for MySpace's youngest members. It will limit the ability for those over 18 to contact 14- and 15-year-old members; adults will have to know young users' real names and email addresses in order to contact them. Furthermore, all users will be able to make their profiles private, so that only their specified friends can contact them.
MySpace has more than 70 million members, and it's fourth on Alexa.com's list of top 500 sites, following Yahoo! (NASDAQ:YHOO), MSN, and Google (NASDAQ:GOOG). Given that number, it's easy to see how a few stories of Internet malfeasance can result in something akin to hysteria. Of course, adding some perspective is not meant to underplay a truism: there are plenty of genuine creeps and crazies on the Internet, and the very nature of the Web gives these types access to exponentially more people than they could have encountered a few decades ago.
It bodes well that News Corp. is addressing these issues, but this safety dance isn't exactly an easy one to improvise. Providing both a fun and safe environment is a tough balancing act, especially when it's young people you're talking about. (Because teens love to hear the word "no.") Furthermore, this is an area where the adage "easy come, easy go" comes to mind. Another social networking site, Friendster, experienced a pretty spectacular rise and subsequent decline in popularity, and News Corp. is no doubt well aware of the dangers of losing appeal. Then there's the fact that it's simple for anyone to misstate their age. Age restrictions are notoriously difficult to enforce on the Internet; teens don't even need a fake I.D.
MySpace is a key part of News Corp.'s efforts to catch up with the Internet. So far, it's been a rollicking success, given MySpace's popularity. However, when you combine legitimate concerns with media coverage that often portrays MySpace in a dangerous light, it's obvious that keeping its cool will be a major challenge.
Microsoft is a Motley Fool Inside Value recommendation. To find out more about value guru Philip Durell's most recent recommendations, click here for a 30-day free trial.
Alyce Lomax does not own shares of any of the companies mentioned.
