welcome back to the deep dive we are so glad
you're here because today we are going to do
something a little different we're gonna conduct
a bit of time travel yeah a digital excavation
exactly and I want to start with like a sensory
exercise want you to close your eyes forget your
smartphone forget the cloud forget 5g mm -hmm
I want you to imagine it's late 2004 maybe early
2005. You're sitting in a probably uncomfortable
chair, maybe one of those weird ergonomic kneeling
chairs if you're fancy, or just a kitchen chair.
Oh yeah, I had one of those. And you're in front
of a beige, chunky desktop monitor. You hear
the hum of the computer fan, and it's working
hard. It sounds like a jet engine taking off.
It really did. A 747 in your bedroom. You open
a web browser. It's probably Internet Explorer,
maybe Firefox if you were a bit edgy, and you
type in a URL. And suddenly your screen just
explodes. It's an absolute assault on the...
senses isn't it you're talking glitter graphics
we are talking neon green text on a black background
or or maybe that red text on a dark blue background
that just makes your eyes water oh the worst
you couldn't even read it then the most aggressive
part the part that strikes fear into the heart
of anyone trying to browse secretly at work or
you know late at night a song starts auto playing
at 100 volume and it's always something super
emotional too it's like some taking back sunday
or maybe a little fallout boy yes and you're
scrambling to find the pause button but you can't
because the page is still loading the background
image is three megabytes and your dial -up connection
is just screaming in agony and amidst all of
that beautiful Beautiful chaos. Staring back
at you from the corner of the screen is a guy
in a white t -shirt. He's looking over his shoulder,
standing in front of a whiteboard, giving you
this vague, friendly, slightly mysterious smile.
The friend we all knew. The first friend. We
are talking, of course, about Myspace. It really
is a cultural artifact at this point. It's like
finding a pottery shard from ancient Rome. Except,
you know, the shard is a low -resolution JPEG
of a guy named Tom. It is. But here's the thing,
and this is why I am so excited about the massive
stack of documents, interviews, and financial
reports we have to get through today. We tend
to remember MySpace as just a nostalgia trip.
You know, the top eight drama, putting your boyfriend
at number one and then demoting your best friend
to number three because she made you mad at lunch.
Right. The politics at the top eight were brutal.
The emo hair, the struggle of learning just enough
HTML to make your profile look cool. Right. It's
remembered as a playground, a digital sandbox.
But when you actually strip away all that nostalgia
and look at the business history, the server
logs, the architectural decisions and what was
happening in those corporate boardrooms. Wow.
It is a fascinating, brutal case study. It is
not just a story about teenagers posting selfies
with their digital cameras. It is a story about
how to build a global empire in literally 10
days. Yeah. And then how to lose it all to a
competitor that was just, well. Boringly clean.
It's a classic business tragedy in the Greek
sense. It has everything. It has a hacker origin
story that involves the FBI, which, I mean, most
people have no idea about. I have no idea. It
has billion -dollar deals that looked like these
huge victories but were actually poison pills.
And it has this catastrophic ending involving
lost data that I think future historians will
probably be weeping over. So that... is our mission
today we're going to trace this timeline from
the launch on august 1st 2003 all the way to
the digital ruin state of the site in the 2020s
and we have got some serious aha moments to get
through we certainly do i think the thing that
stood out to me the most in the deep reading
was the origin story of tom anderson you know
him as the friendly face the guy who just wanted
everyone to be friends right just but the sources
paint a picture of a much more complex technically
gifted character with a bit of a A bit of a dark
past. Lord Flathead. We will definitely get to
Lord Flathead. That name alone deserves its own
deep dive. It really does. And we also have to
talk about the Dragon Horde of Lost Music. That
part of the story, it actually hurts my heart
a little bit. It's a digital burning of the Library
of Alexandria. There is no other way to describe
it. It's a genuine cultural tragedy. Okay, let's
unpack this. Let's start at the very beginning.
August 2003. To really understand why MySpace
exploded the way it did, we have to understand
the vacuum it was filling. What did the landscape
look like? Because the internet wasn't empty.
No, it wasn't. And the king of the hill, or at
least the perceived king at that moment, was
Friendster. Friendster. Wow. I have not thought
about Friendster in probably 20 years. Friendster
is... basically the grandfather of modern social
networking. They had proved the concept. They
proved that social networking was a thing. People
wanted to connect. They wanted to map out their
social graphs online. They wanted to see who
their friends' friends were. It was a revolutionary
idea. A great idea, but Friendster was struggling.
Massively. The sources point out that while Friendster
had all the user interests in the world, it just
didn't have the infrastructure. It was agonizingly
slow. The circle of death. Exactly. You'd click
on a profile and you'd just wait and wait. And
the browser would just spin and spin. And eventually
it would time out. It was a deeply frustrating
experience for everyone who used it. And this
brings us to the first major misconception. The
source is correct. I think a lot of people assume
MySpace was this classic garage startup. You
know, two guys, a laptop, a garage in Palo Alto,
and a dream, right? Yeah, the Zuckerberg mythology.
Or the Steve Jobs mythology. Right, but that's
not the story here. No, and that is completely
wrong. MySpace wasn't a dorm room project. It
wasn't a garage project at all. It was born inside
a corporate machine. It was a project within
a company called Universe. And Universe wasn't
exactly a cool tech company, were they? Not at
all. I mean, if anything, they were kind of the
villains of the early Internet in some people's
eyes. They were a digital marketing company.
OK, what does that mean in 2003 terms? To be
blunt, they were spammers. They were in the business
of direct marketing, email lists, affiliate links.
They were the guys sending you emails about,
you know, weight loss pills or refinance your
home now or punch the monkey to win an iPod.
I remember punch the monkey. I clicked that monkey
so many times I never won the iPod. Nobody won
the iPod. That's the thing. But that was their
business. They understood attention and they
understood databases. So these digital marketers
are sitting in their office in Los Angeles and
they see Friendster blowing up. They see everyone
in the office trying to use Friendster and everyone
complaining about it. So they see Friendster
and they see two things. First, they see the
incredible viral potential. But second, because
they're technical guys, they see the flaw. They
see that Friendster is broken. They realized
they could clone the features, profiles, photos,
connections, comments, but fix the engine. They
wanted to take the concept of Friendster but
make it actually, you know, load. And this leads
us to the 10 -day sprint. This is one of those
stats that just blows my mind every single time
I read it. The sources say the first working
version of MySpace was built and ready for launch
in just 10 days. 10? Days, that is an absurd
speed. I mean, even today with all our AI tools
and frameworks, launching a full social network
in 10 days is a ridiculously heavy lift. Back
then, it was completely unheard of. How is that
even possible from a coding perspective? What
were they doing so differently? Well, it all
comes down to the tech stack. This is a crucial
detail that often gets overlooked in the sort
of pop history version of this story. Friendster
was built using something called Java server
pages or JSP. OK, let's get a little technical
for a second. Break that down for us. What is
JSP? At the time, Java was considered the gold
standard for serious enterprise -level software.
It's robust. It's strict. It's very scalable
if you build it perfectly. But it's also really
heavy. It takes a lot of code to do simple things.
It requires a lot of server resources. So it's
powerful but cumbersome. Exactly. And Friendster's
implementation of JSP was just buckling under
the load. Every time they wanted to change a
feature or fix a bug, it was a massive engineering
effort. It was like trying to turn... an aircraft
carrier. So Frenster is trying to steer a cruise
ship through a narrow canal. Right. A very slow,
very heavy cruise ship. Meanwhile, the team at
Universe, led technically by a guy named Krista
Wolf and his team, they decided to go a completely
different route. They didn't use the serious
language. They used cold fusion. Cold fusion.
Now that is a name I have not heard in a very,
very long time. It sounds like a nuclear physics
term or maybe a bad 80s sci -fi movie. It does.
It's a bit of a relic now. But back in 2003,
Cold Fusion was designed for exactly what its
name implies, rapid reaction. It was a scripting
language built for rapid application development.
So like a quick and dirty way to build a website.
Kind of. Think of it like this. If Friendster
was building a house by handcrafting every single
brick from clay and letting it kiln dry for days,
Myspace was building a house using giant prefabricated
concrete blocks and a staple gun. It's faster,
but maybe a little uglier and less stable. Exactly.
ColdFusion allowed them to build dynamic, database
-driven pages incredibly quickly. It was easier
to write, easier to change, and allowed for much,
much faster iteration. But computer scientists,
the purists, they usually look down on it. It
was considered dirty code. It wasn't elegant.
It wasn't proper engineering. But it worked.
But it worked. While Friendster engineers were
losing sleep trying to optimize their Java code
just to shave milliseconds off load times, the
MySpace team could just... throw five new features
at the wall in a single afternoon. You want a
music player? Boom, done. You want a top eight
friends list? Boom, done. And this technical
decision, this choice to use ColdFusion, it actually
ended up shaping the entire culture of the site,
didn't it? The sources mentioned that the messy
look of MySpace wasn't entirely intentional at
first. It was a byproduct of this move fast and
break things architecture. This is the happy
accident that defined a generation. Because ColdFusion
was so permissive and the code was, let's say,
somewhat loose, they didn't have strict validation
on the About Me fields. What does that mean,
strict validation? It means they didn't clean
the input. They discovered that users could literally
paste HTML and CSS code directly into their profile
bio, and the browser would just render it. It
would just display it. CSS standing for Cascading
Style Sheets. The code that tells a website...
what fonts and colors and backgrounds to use.
Right. Normally, a site like Friendster would
block that immediately. They would scrub the
input. They would say, no, you can't change our
font. You can't change our background color.
This is our brand. You live in our house. Friendster
wanted what we call a walled garden, a uniform,
clean, safe experience. And MySpace just said,
here are the keys to the house. MySpace's philosophy,
partly because they were moving so fast and partly
because of who Tom was, was basically, let them
do it. If you want to paste a block of code that
makes your background a tiling image of glittery
skulls, go for it. I remember the glittery skulls.
If it breaks the layout for someone with a smaller
monitor, well, that's not our problem. If it
makes the text completely unreadable against
your background, that's your choice. It became
the Wild West. But that was the appeal, wasn't
it? That chaos was the point. It was creative
ownership. You didn't just fill out a form on
MySpace. You built your space. It felt like your
room in your parents' house. You could put whatever
posters you want on the wall. You could paint
the ceiling black. You could play your music
way too loud. That is a perfect analogy. Friendster
was a hotel room, clean, standard, completely
impersonal. MySpace was your teenage bedroom.
Messy, loud, and totally... 100 % yours. And
for a teenager in 2004, that feeling of ownership
was addictive. You would spend hours and hours
tweaking your code just to get the perfect border
around your profile picture. Okay, so we have
the text stack. We have the chaotic vibe. But
we still need users. And this goes back to Universe
being a marketing company. They didn't have to
suffer through the cold start problem, did they?
The cold start problem is the death of most social
networks. It's a killer. You launch a platform.
Nobody's there. So nobody joins because, well,
nobody is there. It's a chicken and egg problem.
Right. And MySpace cheated. Or rather, they use
their massive unfair advantage. The email list.
Universe had a database of 20 million email subscribers
from their other ventures. Remember, these are
the people who signed up for punch the monkey
or win a free vacation. 20 million. I mean, that
is the size of a nation state of people. So on
day one, or at least in that first week, they
could send out a massive email blast. Hey, check
out this new site. They forced viral growth.
They lit a match and then poured a giant bucket
of gasoline on it immediately. They didn't wait
for word of mouth. They manufactured it. The
sources also mentioned they gamified it internally
within the company. They did. They held contests
in the L .A. office. Who can get the most people
to sign up? They were bringing people into the
office parties, models, DJs, club promoters,
and taking photos of them and then saying, hey,
to see these photos, you have to log into MySpace.
That is classic growth hacking before the term
growth hacking even existed. It's brilliant.
It was incredibly aggressive, but it worked.
It populated the site with cool people right
from the start. There's another sliding doors
moment in this early phase that I think is so
critical. The dispute over the business model.
This could have gone a completely different way.
This part is fascinating to me. So Chris DeWolf,
the CEO, looked at what they had built. And essentially
it was file storage. Hosting photos costs money.
Bandwidth costs money. Servers cost money. So
he suggested maybe we should charge a subscription
fee. Like a dating site. Maybe five or ten bucks
a month. Can you even imagine? If MySpace had
been behind a paywall in 2003. It would be a
footnote in history. Nobody would have joined.
We would probably be talking about Friendster
today or maybe some other site that came along.
But Brad Greenspan, who was the chair of Universe,
he vetoed it. He slammed the door on that idea.
He understood the network effect. He knew that
to build a real community, you need zero friction.
You have to let everyone in. It seems so obvious
now. I mean, Facebook, Instagram, TikTok, they're
all free. But back then. The freemium model wasn't
really the standard. No, not at all. Paying for
online services was common. AOL cost money. Match
.com cost money. So Greenspan's decision to keep
it free and ad -supported was the catalyst that
allowed that viral growth to just go nuclear.
So we have the engine, the fuel, and the open
road. But we also have driver. We have a face.
We have Tom. Everyone knows the photo. The whiteboard.
The smile. The looking back over the shoulder.
But the sources give us this incredible backstory
that I honestly had absolutely no idea about.
We need to talk about Lord Flathead. This is
where the story just turns into a bit of a techno
thriller. Tom Anderson wasn't just a smiling
face in a T -shirt. He wasn't just a generic
tech bro. In his teenage years living in Escondido,
California, he was a legitimate high -level computer
hacker. Lord Flathead. That was his handle, his
online name. That was his pseudonym in the hacker
underground. And he wasn't just, you know, defacing
school websites or changing his grades. In the
mid -1980s, he hacked into the computer system
of Chase Manhattan Bank. Wait, a major global
financial institution. That is not child's play.
No, we're talking about a massive bank. He navigated
their security, got deep into the system, and
he showed his friends. He created a fake account.
He was just exploring the mainframe of this huge
corporation. I know. And then the FBI showed
up. An FBI raid. Seriously. Their sources confirm
it. A full FBI raid on his parents' house. Can
you imagine being a teenager in Escondido and
having federal agents knocking on your door,
seizing your computers? That's terrifying. Because
he was a minor at the time. He was just a teenager.
He was spared the harshest punishments like federal
prison. But his equipment was seized. He was
put on probation. This was a serious federal
incident. He was almost prosecuted under these
new hacking laws that were just coming into effect.
That is just wild. So the guy who created the
friendliest, most open place on the Internet,
the guy who was everyone's first friend, started
out as a black hat hacker breaking into banks.
It creates this fascinating contrast, doesn't
it? On one hand, you have the corporate image
of MySpace -friendly, open, safe -ish. On the
other, the actual DNA of the founder is someone
who deeply understands systems, who understands
how to break rules, and who has a profound technical
literacy. It explains so much about the product
philosophy we talked about earlier. The whole
allow the users to hack their own profiles thing.
Yeah. That feels like a hacker's philosophy.
Exactly. Here's the code. Do what you want with
it. A walled garden like Friendster or later
Facebook is a very corporate idea. It says we
control the experience. Tom's approach was more
like the system is yours to manipulate. It's
very anti -establishment, even though it became
this billion dollar establishment. But the corporate
world didn't always love that approach, did they?
No. Not at all. There is a very telling quote
in the source material from a News Corp executive
later on after the acquisition. They described
Tom not as a visionary, but as a complete bottleneck.
Ouch. Why a bottleneck? That's a harsh word.
Because he cared too much about the product details,
he didn't want to just ship features to make
money. He wanted the product to feel right. He
was deeply protective of the community and the
user experience. In the corporate world, wanting
to refine a feature rather than just launching
it immediately to juice revenue numbers, that
is seen as obstruction. He was the no man in
a company of yes men. It's a classic tension,
right? The creative founder versus the suits.
And speaking of the suits, we are now moving
into the era. of big, big money. Section three,
the peak. The year is 2005. MySpace is growing
exponentially. We are talking 16 million monthly
users by the middle of 2005. It is the hottest
thing on the entire internet. It's where culture
is happening. Bands are breaking on MySpace.
Trends are starting there. Tila Tequila is happening.
And naturally, the media giants start circling.
They see the eyeballs. They see the engagement.
And they want to own it. It turns into a bidding
war. On one side, you have Viacom. They own MTV.
Which feels like the natural home, right? MySpace
was all about music. MTV was music television.
It fits perfectly. It would have been a perfect
cultural fit. You can just imagine it. MTV could
have integrated MySpace into TRL and their other
shows. It made so much sense. But then Rupert
Murdoch and News Corporation come in from the
top rope. They dropped $580 million. $580 million
in cash. At the time, Silicon Valley was shocked.
They thought Murdoch had massively overpaid.
They thought he was crazy. But very, very quickly,
it looked like the bargain of the century. Within
a year, analysts were saying MySpace was worth
triple that amount. It looked like Murdoch had
pulled off a masterstroke. He beat Viacom. He
owned the Internet's biggest property. He was
the king of old media and new media. But there
is a painful what -if moment right around here,
a major fork in the road. The Facebook meeting.
Yes. In February 2005, just before the News Corp
sale, a young Mark Zuckerberg met with Chris
DeWolf. Facebook was just a college directory
at that point. It wasn't open to the public yet,
but it was growing like a weed on campuses. And
Zuckerberg offered to sell Facebook to MySpace.
That was the asking price. $75 million. $75 million
for Facebook. That's unbelievable to even say
out loud. I mean, today, Facebook or Meta is
worth, what, hundreds and hundreds of billions?
And D. Wolf said no. He passed. He passed on
it. Now, we have to be fair. We have to look
at this with 2005 eyes, not 2026 eyes. Sure.
Hindsight is 20 -20. In 2005, $75 million for
a college directory when you are the undisputed
king of the world. It seems high. D. Wolf probably
thought... Why would we buy them? We are crushing
them. We have 16 million users. They have a fraction
of that. We can just crush them. We can launch
MySpace College tomorrow and wipe them out. Hubris.
It's a powerful, powerful drug. It is the fatal
flaw in almost every single business tragedy.
Underestimating the scrappy competitor, thinking
you are invincible just because you're big. So
News Corp owns MySpace. They are riding high.
And then in August 2006, they signed the deal.
The deal that many experts, including the ones
in our sources, say was the real beginning of
the end. The Google deal. This is the golden
handcuffs. Explain the terms for us, because
on the surface, $900 million sounds like an absolute
win. It was a $900 million deal spread over three
years. In exchange, Google gets exclusive rights
to provide search results and, more importantly,
advertisements on MySpace. On paper, that sounds
amazing. They just bought the company for $580
million, and now they are getting $900 million
just for letting Google put some ads up. It's
pure profit. They've already made their money
back, and then some. That's exactly how News
Corp saw it. We won. We are business geniuses.
But there was a catch, a huge catch. The deal
had very strict performance targets. To get that
full $900 million payout, MySpace had to generate
a specific massive number of ad impressions and
searches every quarter. Ah, so they had a quota.
A massive unyielding quota. And this is the so
what of the entire story. This is the mechanism
of the downfall. To hit those numbers, MySpace
had to turn the entire site into a giant blinking
billboard. They needed more pages, more pop -ups,
more banner ads, more everything. Exactly. They
couldn't just have a clean profile page anymore.
They needed to shove three banner ads, a sponsored
search bar, and a pop -up video right into the
user's face. They had to break up content onto
multiple pages just to get more clicks and serve
more ads. I remember this era so vividly. The
site became physically slower. It was heavy.
My browser would crash all the time. And it was
just ugly. It felt like walking into Times Square,
but everything is screaming at you at once. It
was just clutter. Visual noise. And this is the
crucial context. While MySpace was busy trying
to please News Corp and Google by jamming ads
into every available pixel, what was Facebook
doing? Facebook was clean. So clean. Blue and
white. No clutter. Minimalist. Fast. And focused
entirely on user engagement, not ad impressions.
Facebook wasn't trying to sell you a ringtone.
They were trying to help you find your friend
from high school. They were trying to help you
tag a photo of your friends from the party last
night. It's a fundamental difference in strategy,
isn't it? MySpace was optimizing for revenue
to satisfy a corporate contract. Facebook was
optimizing for utility to satisfy the user. And
in the long run, the user always always wins.
A former executive mentioned in the sources that
they were paralyzed. They couldn't clean up the
site design because if they removed an ad slot
to make the page look better and load faster,
they would miss their revenue target and lose
the Google money. They were completely trapped
by their own success. They sold their user experience
for $900 million. They took the short -term cash
and in doing so, they sacrificed the long -term
viability of the entire product. That sits the
stage perfectly for section four, the fall. We're
looking at 2008 and 2009 now. This is where the
lines on the graph finally cross. The data points
from this period are just brutal. In April 2008,
Facebook overtakes MySpace and Alexa rankings
globally for the first time. By May 2009, Facebook
has more unique U .S. visitors. The king is dead.
Why did it happen so fast, though? We talked
about the ads, but there was a deeper strategic
difference, too, right? The sources talk about
the portal strategy versus the network strategy.
This is a bit of business theory, but it's so
crucial to understanding the Internet at that
time. MySpace, under News Corp's direction, tried
to become a portal. Like Yahoo or AOL in the
90s. Exactly. They wanted to be a destination
where you go to consume content. They launched
MySpace TV, MySpace Records, MySpace News. They
wanted you to come to MySpace to watch celebrity
gossip videos and listen to the new Britney Spears
single. They wanted to be an entertainment hub.
They wanted to be a TV station. Or a magazine.
Right. But Facebook focused on being a utility.
A communication network. They weren't trying
to sell you a band or a video. They were trying
to reduce the friction of talking to people.
They introduced the news feed. They introduced
photo tagging. They made it easier to be social.
They were adding quality of life features. That's
the perfect way to put it. MySpace added features
to improve entertainment consumption. Facebook
added features to improve social connection.
And it turns out, on a social network, people
want to be social. They don't just want to be
broadcast at. It's a shocking concept, I know.
But there was another factor driving people away,
and it is a dark one. We have to talk about the
safety crisis. The sources use a very intense
phrase here, one that really stuck with me, vortex
of perversion. That phrase sounds like something
from a Victorian moral panic pamphlet. It actually
comes from Richard Blumenthal, who was the attorney
general of Connecticut at the time. There was
this massive moral panic that swept the media
in 2006 and 2007. I remember the news reports.
all the Dateline NBC style stuff to catch a predator.
The dominant narrative was that MySpace was a
hunting ground for adults targeting minors. And
to be fair, there were legitimate issues because
MySpace allowed anonymity. Remember, you could
be Lord Flathead or Sparkle Pony 2000. And because
the age verification was very loose, it was incredibly
difficult to police. The spam filters were weak.
It just felt unsafe. It felt creepy. You would
get messages from bots or from people who clearly
weren't who they said they were. And Facebook,
from the very beginning, required real names.
That was the killer differentiator. At first,
you needed a .edu email address, which meant
you were a real college student. Then, even when
they opened it up to everyone, they enforced
a real -name policy. It created a sense of accountability.
It created trust. For parents and for users who
were just tired of random spam bots and creepy
messages, Facebook became the sanctuary. The
vortex of perversion label stuck to MySpace like
tar, and it drove the key 18 to 24 -year -old
demographic away in droves. They graduated from
the chaotic high school playground of MySpace
to the safer, cleaner college campus of Facebook.
Now, before we move to the total collapse, there
is one more theory mentioned in the sources that
I find fascinating. The calculated takedown theory.
This comes from Tim Vanderhoek, who was a later
CEO of MySpace after the fall. Right. This is
a little bit of a conspiracy theory, but it has
some strong business logic behind it. He alleges
that Google actually used its acquisition of
YouTube to systematically kill MySpace. Walk
us through that, because MySpace and Google were
partners, right? They had the $900 million deal.
They were partners on paper. But you have to
remember, Myspace's lifeblood, especially with
musicians, was music and video. It was the place
for bands. If you wanted to hear the new song
by the Killers, you went to their Myspace page.
Right. The Myspace music player. was iconic.
Vanderhook argues that Google, once they bought
YouTube for $1 .65 billion, started manipulating
its own search results. They started steering
all search traffic for music and video away from
MySpace and towards YouTube, effectively starving
MySpace of its main attraction. So if you search
for a band on Google, instead of their MySpace
page popping up first, which you used to, the
YouTube link for their music video would pop
up. Precisely. And since MySpace was locked into
that deal where Google provided their on -site
search as well, they were essentially partnered
with the very company that was cutting off their
oxygen supply. They were paying the assassins.
That is just ruthless corporate strategy. Whether
it was a calculated takedown or just Google's
algorithm naturally favoring its own superior
video platform is up for debate. But the effect
was exactly the same. MySpace lost its dominance
in entertainment. YouTube became the video player
of the internet. MySpace became, well... Nothing.
So users are leaving in droves, advertisers are
fleeing, the site is buggy and slow, it is 2011,
the party is officially over. The exodus was
brutal. In March 2011, the stats showed MySpace
lost 10 million users in a single month. 10 million
in a month. That is a free fall. That's an evacuation.
That is not user churn. That is a full -blown
disaster. It's a ghost town. And News Corp wants
out. Rupert Murdoch, who had publicly called
the purchase a huge mistake, puts it up for sale.
He basically says, get this thing off my books.
I don't care what we get for it. They bought
it for $580 million. What did they sell it for?
Approximately $35 million. Oh, my goodness. From
$580 million down to $35 million. From a valuation
peak of, at one point they thought it was worth
$12 billion, down to selling for $35 million.
That is just pennies on the dollar. It is a 99
% loss of value. It is one of the biggest destructions
of shareholder wealth in modern tech history.
Who bought it? I mean, who would even buy a sinking
ship like that? A company called Specific Media.
And here's a fun fact. Justin Timberlake. JT.
Yes. Justin Timberlake took an ownership stake.
They tried to pivot purely into a music discovery
platform, basically admitting defeat and saying,
we aren't a social network anymore. We are a
music site. We are going to be Spotify before
Spotify. And it didn't work. It did not work.
But that brings us to perhaps the most tragic
part of this entire deep dive. Section six, the
digital burning of Alexandria. This happened
much later. This is 2019. By this point, MySpace
is a complete zombie site. But it still holds
this massive, invaluable archive. Millions of
bands, garage bands, emo bands, hip hop artists.
They all uploaded their tracks to MySpace from
2003 to 2015. For many of them, it was the only
copy they had. It was a time capsule of an entire
era of music. And then the news breaks. A server
migration gone wrong. Oops. Oops. Doesn't quite
cover it. They announced that due to a technical
error during a server move. All user content
uploaded between 2003 and 2015 was wiped out,
corrupted, gone forever. How much did we lose?
Give me the scale of this. Over 50 million songs.
50 million. That is a staggering number. That
is more songs that are currently on Spotify.
By 14 million different artists, plus all the
photos, all the videos, all the angsty blog posts,
gone. That is just devastating. I mean, think
about the cultural history. The early demos of
bands that became huge. My Chemical Romance,
Katy Perry, Arctic Monkeys all started there.
But maybe more importantly, the millions of bands
that never made it. The local scenes, the high
school bands, the bad poetry, all of it just
deleted. There was a lot of skepticism at the
time, as you can imagine. Some experts speculated,
was this really a botched migration or did they
just not want to pay the server costs to host
50 million dead songs anymore? It is a convenient
excuse, isn't it? Oh, no, we accidentally lost
the data. We were paying millions of dollars
at store. The official line remains a botched
migration, but the result is the same. A massive
chunk of early 2000s musical and internet culture
just vanished overnight. It's like if a library
burned down but nobody noticed for years until
they tried to check out a book. But there is
a tiny glimmer of hope. The Dragon Horde. Yes.
The Internet Archive. the absolute heroes of
the web. Bless them. Apparently, an anonymous
academic group had been downloading MP3s from
MySpace between 2008 and 2010 for some kind of
research study. They had managed to grab about
490 ,000 songs before they stopped. Okay, so
half a million out of 50 million. It's 1%. It's
1%, but it's something. They uploaded this entire
collection to the Internet Archive, calling it
the MySpace Dragon Horde. So if you were in a
band in 2009, there is a tiny, tiny chance your
song survived in the dragon horde. But for most,
it is just silence. That is a very heavy lesson
in digital permanence or the lack thereof. We
assume that because something is on the Internet,
it is forever. It is written in sand, not in
stone. If the server bill isn't paid or someone
makes a mistake, the history just disappears.
So MySpace is effectively dead as a cultural
force. The data is gone. The users are gone.
But what about the man? What about Tom? This
is my favorite part of the story. In Silicon
Valley, the narrative is usually founder builds
company, founder stays on as CEO forever, founder
testifies before Congress, founder tries to build
a rocket to Mars or buy an island or fight a
cage match. Right. They can't let go. They need
the power. They need the relevancy. They need
to be the guy. Tom Anderson let go. Where is
he now? What is he doing? He took his money.
Remember, he cashed out in that original sale
to News Corp. And he effectively retired in 2009.
He didn't start another company. He didn't become
a venture capitalist. And he is not sitting on
a board of directors. He's not an angel investor
screaming on Twitter. No. He is a landscape photographer.
Landscape photographer. That is the most wholesome,
unexpected twist imaginable. If you look him
up on Instagram now, he travels the world. He's
in Thailand, Myanmar, the Maldives, Burning Man.
And he takes these incredibly beautiful, serene
photos of nature. Waterfalls, mountains, deserts.
That sounds genuinely lovely. Like a good life.
There is a quote from him in the sources that
I think sums it up perfectly. He said, I like
the idea that anything can happen. Adventure
in the unknown has always been appealing to me.
He explicitly said he has no interest in returning
to the tech grind. He saw what it did to people
and wanted no part of it. He escaped. He won
the game. He really did. He built the biggest
thing in the world, sold it at the absolute peak,
and walked away before the world turned on him.
He preserved his sanity. He preserved his anonymity,
for the most part. Meanwhile, the site itself.
The site today is a digital ruin. As of late
2024, it is still online but in read -only mode.
Most images are broken links. The music player
doesn't work. It is like walking through an abandoned
mall where the mannequins have all fallen over
and there is a thick layer of dust on everything.
That's a spooky image. It really just stands
as a monument to what was. So let's bring this
all together. What does this deep dive really
tell us? We started with the mission to see this
as a business case study. I think the summary
is this. Speed wins in the beginning. Cold fusion,
the 10 -day sprint that allowed them to beat
Friendster. Being fast is better than being perfect
at the start, but sustainability wins in the
end. Myspace won the sprint but lost the marathon
because they sacrificed their user experience
for short -term revenue with that Google deal.
And they let technical debt accumulate until
the site was buggy and unusable. They stopped
caring about the person sitting in the chair.
Exactly. Facebook won because they played the
long game on utility, on trust, and on clean,
fast design. They understood that the product
is the network, not the ads you can cram onto
the page. And for the listener, why should you
care about a dead social network from 20 years
ago? I think the lesson is about your data. We
trust these platforms, Instagram, TikTok, Spotify,
with our memories, our music, our entire lives.
But if 12 years of music can vanish from a major
platform like MySpace overnight, what guarantees
do you really have for your cloud storage? For
your photos? That is a chilling thought. Back
up your photos, folks. Hard drives are cheap.
Memories are priceless. Don't rely on the cloud
to be there forever. Absolutely. Print your photos.
Buy the vinyl record. Have a physical copy. I
want to end with a final thought, something for
you to chew on. We live in an era of tech billionaires
who seem obsessed with power, with influence,
and with shaping the future of humanity, often
in very controversial ways. We have Elon buying
Twitter to change public discourse. We have Zuck
building the metaverse. The Titans trying to
rule the world from their fortresses. And then
we have Tom. Tom Anderson was the face of the
biggest website on Earth. He was arguably the
first influencer. He had hundreds of millions
of friends. And yet he walked away to live a
quiet, creative life, taking pictures of sunsets.
He chose happiness over power. Exactly. So the
question I'm left with is, in the grand chaotic
history of the Internet, is Tom actually the
smartest one of them all? I think he might be.
I really do. That is it for this Deep Dive. Thanks
for listening. See you next time.