From Web 2.0 to Business 2.0 – MySpace pulls Photobucket videos

Apr 11, 2007
in Entrepreneurship, Web/Tech

The alarm bells are ringing in the web world (see the Techmeme discussion) - one of the gorillas in the space is flexing its muscle and protecting its turf as MySpace is preventing Photobucket photos and videos from appearing on its site. As Om Malik mentions, this happened once before and I am sure the MySpace folks have done some hard thinking about whether or not their users will vote with their feet and leave, and if they do, what kind of impact it will have on its business. I guess they figure it won't be too large of an impact for them. Anyway, all of this is not a surprise as this is the way business works. Forget about Web 2.0, this is Business 2.0 (ok, someone else already has the trademark). The world of openness is only open so much because if you get to0 big and threaten someone's turf and livelihood, guess what...they will fight back. I put a timely post up two days ago titled "Why Startups Must Control Their Own Destiny." The point is that the only person you can really rely on is yourself and in this world of mashups, widgets, and open APIs, distribution is easy...getting money is hard. Well guess what-distribution via widgets on MySpace was relatively frictionless, but now that Photobucket is a serious player, the Gorilla is fighting back and that is just the way the world works. I am not saying that you should not leverage free distribution, but that you should prepare yourself for the day that it may disappear. In one of my portfolio companies we have a saying, "Google giveth and Google taketh away." The point is you should take a hard look at your business, and if you are too dependent on any one partner or distribution method, you should stay awake every night thinking about how to diversify your business. And for those who built their business off of one partner and think they are worth hundreds of millions or billions of dollars, I can assure you that if that one partner is not buying you, there will be appropriate discounts paid to your business based on the fact that the acquiring company's competitor could shut your lifeline off tomorrow. Yeah, this is nasty stuff, but this is business and companies need to make money.

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This post was written by Ed Sim who has written 357 posts on BeyondVC.

2 Responses to “From Web 2.0 to Business 2.0 – MySpace pulls Photobucket videos”

Muskie Apr 20, 2007 at 7:01 pm #

I don’t know if this is related but on some other forum, there were links to PhotoBucket and all the images were missing, when I clicked on the link. While trying to see these imags I noticed PhotoBucket’s site is a lot busier and glossier. Before it was a real barebones photo sharing site.

I think MySpace is a zoo for the most part. Based on the fact that after encouraging my sister several times to check out various Web 2.0 sites she seems to put a lot of time and effort into Flickr and now FaceBook. She checks the latter many times a day. This is particularly noteable as I’m over thirty and my sister is right around thirty, lots of older people are starting to use these Online Networks and besides the obvious ones of Xing and LinkedIn a lot of older aluni are starting to join FaceBook. It helps that they let non-Americans join.

FaceBook can also handle Japanese and Chinese characters, MySpace can not, or at least couldn’t last time I tried. MySpace has a lot of phony profiles, it may be good for marketers as they can create a site for their movie or actor, MMA fighter, or band, but FaceBook because it almost requires you to be a university student or alumni has a lot of real people, who aren’t selling anything or trying to premote themselves.

Anyone with a disposeable email address can create a MySpace page. I’ve also noticed the arrival of automated comment spam at MySpace.

FaceBook also seems to get mentioned almost Daily by Michael Landsberg on his TV show “Off the Record” he is always asking sports figures how many friends they have on FaceBook.

MySpace may have the raw numbers, but FaceBook seems to have real committed people and probably a more attractive demographic. They are also pretty smart about the size of the ads and targeting them.

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Anonymous Apr 24, 2007 at 11:37 am #

I guess you must have spent half of your life on pure pondering which eventually condensed to those sightful thoughts and very inquistive entries. They are just so enlightening. I had a good time reading/reflecting on them and they tought me way more than I had learnt in the past three years in uni.

Two Thumbs up or three for sure if I ever get to have more!

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