Bad news for News Corp.
The numbers aren't encouraging. Researcher comScore says that MySpace had 71 million unique U.S. visitors in April, versus 67.5 million for Facebook. A year ago, MySpace had more than doubled Facebook's visitor count: 72.2 million vs. 35.7 million
Not just a Jeremy Irons movie
Talk about a reversal of fortune! How did it happen? My sense is that MySpace failed to become a platform. Software developers flocked instead to Facebook, which put up cash to help fund businesses whose software would work inside its service.
Some of those developers are profiting handsomely. Mob Wars, a Facebook game created by David Maestri, was producing $22,000 a day in revenue last summer. At least one blog now speculates that Mob Wars generates $1 million in revenue per month. Such numbers help to explain why Facebook is on pace to generate as much as $500 million in 2009 revenue -- it's a console, the social media equivalent of Microsoft's
MySpace, by contrast, is seeing development activity decline weekly, according to blogger TechCrunch. We don't know where the coders are headed, but Facebook and Twitter seem to be likely options.
Especially Twitter. New data from comScore says that the site attracted 32 million global visitors in April. Wowza.
Buffett is right
In recent months, a former Facebook executive, Owen Van Natta, has replaced MySpace founders Chris DeWolfe and Tom Anderson. Page views continue to slide, and next year, a revenue-rich partnership deal with Google
Unless, that is, you're betting on platforms. Go back to what I said about Facebook. Whereas MySpace is a site, Facebook is a moneymaking opportunity for coders -- a platform supported by an entire ecosystem of interested parties, rather than visitors alone.
So if you plan to buy tech, buy platforms that feature these three traits:
Customer commitment is obviously important, and it's one feature MySpace never lacked. Millions of users flocked to the site to post photos, find friends, and share ideas. Among public companies, Netflix
For Motley Fool Rule Breakers recommendation salesforce.com
Historically, no platform has ever equaled Windows as a profit maker for coders. Today, Apple's
MySpace is a cautionary tale for tech investors, sure. But it needn't be the deterrent to tech investing that Buffett advises. History shows that platforms such as Windows have created massive wealth for developers and investors alike, a trend that probably won't change anytime soon. Invest accordingly.
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