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MySpace gives up

MySpace, which has been steadily losing ground to Facebook over the last year like a cartoon character that’s run off a cliff, has just announced today that it’s strategy against its fierce and formidable competitor is . . . to give up. As reported in today’s Financial Times, CEO Owen Van Natta has decided that MySpace will no longer compete against Facebook.

Okay, there is such a thing as a strategic retreat when the other guy is busy defeating themselves — that’s how Kutuzov beat a vastly superior Napoleanic Army back in 1812 — but “giving up” on your product is, as far as I can tell, rarely a formula for marketing success. Am I missing something? Sure, Facebook has rocketed past the feckless downsized folks at MySpace, but MySpace is still clocking 100 million unique visitors every month, which is, in any book, a pretty successful online product.

So, if they’re giving up on social networking, what’s MySpace going to do?

Music.

Van Natta calls it MySpace’s “strength.”

So let me get this straight. MySpace is giving up on social networking, which it knows how to do, because it can’t compete with Facebook. So it’s purchased music purchasing software iLike, collected a whopping pile of music videos, so that it can compete with lightweights like . . . Apple’s iTunes and Google’s YouTube.

While this may make sense in terms of MySpace’s dominance in long-tail music marketing, isn’t that dominance predicated on its social network power? If you dump the engine, will the car still go?

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