WEBVTT 00:00:00.000 --> 00:00:02.439 welcome back to the deep dive we are so glad 00:00:02.439 --> 00:00:05.620 you're here because today we are going to do 00:00:05.620 --> 00:00:07.179 something a little different we're gonna conduct 00:00:07.179 --> 00:00:11.419 a bit of time travel yeah a digital excavation 00:00:11.419 --> 00:00:14.080 exactly and I want to start with like a sensory 00:00:14.080 --> 00:00:16.640 exercise want you to close your eyes forget your 00:00:16.640 --> 00:00:19.780 smartphone forget the cloud forget 5g mm -hmm 00:00:19.780 --> 00:00:24.460 I want you to imagine it's late 2004 maybe early 00:00:24.460 --> 00:00:27.539 2005. You're sitting in a probably uncomfortable 00:00:27.539 --> 00:00:30.620 chair, maybe one of those weird ergonomic kneeling 00:00:30.620 --> 00:00:32.899 chairs if you're fancy, or just a kitchen chair. 00:00:33.020 --> 00:00:34.600 Oh yeah, I had one of those. And you're in front 00:00:34.600 --> 00:00:36.960 of a beige, chunky desktop monitor. You hear 00:00:36.960 --> 00:00:38.719 the hum of the computer fan, and it's working 00:00:38.719 --> 00:00:40.799 hard. It sounds like a jet engine taking off. 00:00:40.880 --> 00:00:43.880 It really did. A 747 in your bedroom. You open 00:00:43.880 --> 00:00:46.000 a web browser. It's probably Internet Explorer, 00:00:46.259 --> 00:00:48.399 maybe Firefox if you were a bit edgy, and you 00:00:48.399 --> 00:00:50.920 type in a URL. And suddenly your screen just 00:00:50.920 --> 00:00:53.399 explodes. It's an absolute assault on the... 00:00:53.420 --> 00:00:55.479 senses isn't it you're talking glitter graphics 00:00:55.479 --> 00:00:59.060 we are talking neon green text on a black background 00:00:59.060 --> 00:01:02.219 or or maybe that red text on a dark blue background 00:01:02.219 --> 00:01:05.079 that just makes your eyes water oh the worst 00:01:05.079 --> 00:01:07.840 you couldn't even read it then the most aggressive 00:01:07.840 --> 00:01:11.560 part the part that strikes fear into the heart 00:01:11.560 --> 00:01:14.400 of anyone trying to browse secretly at work or 00:01:14.400 --> 00:01:18.280 you know late at night a song starts auto playing 00:01:18.280 --> 00:01:20.859 at 100 volume and it's always something super 00:01:20.859 --> 00:01:23.719 emotional too it's like some taking back sunday 00:01:23.719 --> 00:01:25.760 or maybe a little fallout boy yes and you're 00:01:25.760 --> 00:01:27.760 scrambling to find the pause button but you can't 00:01:27.760 --> 00:01:29.920 because the page is still loading the background 00:01:29.920 --> 00:01:32.700 image is three megabytes and your dial -up connection 00:01:32.700 --> 00:01:35.760 is just screaming in agony and amidst all of 00:01:35.760 --> 00:01:39.540 that beautiful Beautiful chaos. Staring back 00:01:39.540 --> 00:01:42.540 at you from the corner of the screen is a guy 00:01:42.540 --> 00:01:45.439 in a white t -shirt. He's looking over his shoulder, 00:01:45.500 --> 00:01:47.400 standing in front of a whiteboard, giving you 00:01:47.400 --> 00:01:50.379 this vague, friendly, slightly mysterious smile. 00:01:50.620 --> 00:01:53.319 The friend we all knew. The first friend. We 00:01:53.319 --> 00:01:55.420 are talking, of course, about Myspace. It really 00:01:55.420 --> 00:01:57.700 is a cultural artifact at this point. It's like 00:01:57.700 --> 00:02:00.480 finding a pottery shard from ancient Rome. Except, 00:02:00.579 --> 00:02:02.680 you know, the shard is a low -resolution JPEG 00:02:02.680 --> 00:02:05.510 of a guy named Tom. It is. But here's the thing, 00:02:05.530 --> 00:02:08.189 and this is why I am so excited about the massive 00:02:08.189 --> 00:02:12.810 stack of documents, interviews, and financial 00:02:12.810 --> 00:02:15.050 reports we have to get through today. We tend 00:02:15.050 --> 00:02:17.550 to remember MySpace as just a nostalgia trip. 00:02:17.879 --> 00:02:20.219 You know, the top eight drama, putting your boyfriend 00:02:20.219 --> 00:02:22.560 at number one and then demoting your best friend 00:02:22.560 --> 00:02:24.639 to number three because she made you mad at lunch. 00:02:24.719 --> 00:02:26.719 Right. The politics at the top eight were brutal. 00:02:26.939 --> 00:02:30.280 The emo hair, the struggle of learning just enough 00:02:30.280 --> 00:02:33.000 HTML to make your profile look cool. Right. It's 00:02:33.000 --> 00:02:35.060 remembered as a playground, a digital sandbox. 00:02:35.479 --> 00:02:37.800 But when you actually strip away all that nostalgia 00:02:37.800 --> 00:02:39.780 and look at the business history, the server 00:02:39.780 --> 00:02:42.539 logs, the architectural decisions and what was 00:02:42.539 --> 00:02:45.180 happening in those corporate boardrooms. Wow. 00:02:45.280 --> 00:02:48.180 It is a fascinating, brutal case study. It is 00:02:48.180 --> 00:02:50.539 not just a story about teenagers posting selfies 00:02:50.539 --> 00:02:52.900 with their digital cameras. It is a story about 00:02:52.900 --> 00:02:55.740 how to build a global empire in literally 10 00:02:55.740 --> 00:02:58.419 days. Yeah. And then how to lose it all to a 00:02:58.419 --> 00:03:02.229 competitor that was just, well. Boringly clean. 00:03:02.409 --> 00:03:04.650 It's a classic business tragedy in the Greek 00:03:04.650 --> 00:03:06.629 sense. It has everything. It has a hacker origin 00:03:06.629 --> 00:03:09.530 story that involves the FBI, which, I mean, most 00:03:09.530 --> 00:03:12.250 people have no idea about. I have no idea. It 00:03:12.250 --> 00:03:14.750 has billion -dollar deals that looked like these 00:03:14.750 --> 00:03:17.069 huge victories but were actually poison pills. 00:03:17.210 --> 00:03:20.229 And it has this catastrophic ending involving 00:03:20.229 --> 00:03:23.289 lost data that I think future historians will 00:03:23.289 --> 00:03:26.120 probably be weeping over. So that... is our mission 00:03:26.120 --> 00:03:29.000 today we're going to trace this timeline from 00:03:29.000 --> 00:03:32.900 the launch on august 1st 2003 all the way to 00:03:32.900 --> 00:03:37.159 the digital ruin state of the site in the 2020s 00:03:37.159 --> 00:03:40.479 and we have got some serious aha moments to get 00:03:40.479 --> 00:03:42.939 through we certainly do i think the thing that 00:03:42.939 --> 00:03:44.580 stood out to me the most in the deep reading 00:03:44.580 --> 00:03:47.039 was the origin story of tom anderson you know 00:03:47.039 --> 00:03:48.780 him as the friendly face the guy who just wanted 00:03:48.780 --> 00:03:51.300 everyone to be friends right just but the sources 00:03:51.300 --> 00:03:54.180 paint a picture of a much more complex technically 00:03:54.180 --> 00:03:57.259 gifted character with a bit of a A bit of a dark 00:03:57.259 --> 00:03:59.580 past. Lord Flathead. We will definitely get to 00:03:59.580 --> 00:04:01.819 Lord Flathead. That name alone deserves its own 00:04:01.819 --> 00:04:03.900 deep dive. It really does. And we also have to 00:04:03.900 --> 00:04:06.479 talk about the Dragon Horde of Lost Music. That 00:04:06.479 --> 00:04:08.819 part of the story, it actually hurts my heart 00:04:08.819 --> 00:04:10.879 a little bit. It's a digital burning of the Library 00:04:10.879 --> 00:04:13.500 of Alexandria. There is no other way to describe 00:04:13.500 --> 00:04:16.420 it. It's a genuine cultural tragedy. Okay, let's 00:04:16.420 --> 00:04:17.800 unpack this. Let's start at the very beginning. 00:04:17.980 --> 00:04:23.259 August 2003. To really understand why MySpace 00:04:23.259 --> 00:04:25.639 exploded the way it did, we have to understand 00:04:25.639 --> 00:04:28.160 the vacuum it was filling. What did the landscape 00:04:28.160 --> 00:04:30.379 look like? Because the internet wasn't empty. 00:04:30.519 --> 00:04:33.339 No, it wasn't. And the king of the hill, or at 00:04:33.339 --> 00:04:35.259 least the perceived king at that moment, was 00:04:35.259 --> 00:04:38.500 Friendster. Friendster. Wow. I have not thought 00:04:38.500 --> 00:04:41.060 about Friendster in probably 20 years. Friendster 00:04:41.060 --> 00:04:44.180 is... basically the grandfather of modern social 00:04:44.180 --> 00:04:47.360 networking. They had proved the concept. They 00:04:47.360 --> 00:04:50.680 proved that social networking was a thing. People 00:04:50.680 --> 00:04:52.480 wanted to connect. They wanted to map out their 00:04:52.480 --> 00:04:54.500 social graphs online. They wanted to see who 00:04:54.500 --> 00:04:56.420 their friends' friends were. It was a revolutionary 00:04:56.420 --> 00:05:00.079 idea. A great idea, but Friendster was struggling. 00:05:00.889 --> 00:05:03.470 Massively. The sources point out that while Friendster 00:05:03.470 --> 00:05:05.490 had all the user interests in the world, it just 00:05:05.490 --> 00:05:07.970 didn't have the infrastructure. It was agonizingly 00:05:07.970 --> 00:05:10.750 slow. The circle of death. Exactly. You'd click 00:05:10.750 --> 00:05:13.069 on a profile and you'd just wait and wait. And 00:05:13.069 --> 00:05:15.430 the browser would just spin and spin. And eventually 00:05:15.430 --> 00:05:17.610 it would time out. It was a deeply frustrating 00:05:17.610 --> 00:05:21.129 experience for everyone who used it. And this 00:05:21.129 --> 00:05:24.209 brings us to the first major misconception. The 00:05:24.209 --> 00:05:26.389 source is correct. I think a lot of people assume 00:05:26.389 --> 00:05:31.040 MySpace was this classic garage startup. You 00:05:31.040 --> 00:05:33.660 know, two guys, a laptop, a garage in Palo Alto, 00:05:33.879 --> 00:05:36.980 and a dream, right? Yeah, the Zuckerberg mythology. 00:05:37.519 --> 00:05:40.120 Or the Steve Jobs mythology. Right, but that's 00:05:40.120 --> 00:05:42.120 not the story here. No, and that is completely 00:05:42.120 --> 00:05:44.939 wrong. MySpace wasn't a dorm room project. It 00:05:44.939 --> 00:05:47.300 wasn't a garage project at all. It was born inside 00:05:47.300 --> 00:05:49.579 a corporate machine. It was a project within 00:05:49.579 --> 00:05:52.699 a company called Universe. And Universe wasn't 00:05:52.699 --> 00:05:55.519 exactly a cool tech company, were they? Not at 00:05:55.519 --> 00:05:57.500 all. I mean, if anything, they were kind of the 00:05:57.500 --> 00:06:00.300 villains of the early Internet in some people's 00:06:00.300 --> 00:06:01.819 eyes. They were a digital marketing company. 00:06:02.100 --> 00:06:04.300 OK, what does that mean in 2003 terms? To be 00:06:04.300 --> 00:06:06.519 blunt, they were spammers. They were in the business 00:06:06.519 --> 00:06:09.139 of direct marketing, email lists, affiliate links. 00:06:09.439 --> 00:06:11.740 They were the guys sending you emails about, 00:06:11.839 --> 00:06:14.360 you know, weight loss pills or refinance your 00:06:14.360 --> 00:06:17.360 home now or punch the monkey to win an iPod. 00:06:17.500 --> 00:06:19.600 I remember punch the monkey. I clicked that monkey 00:06:19.600 --> 00:06:22.199 so many times I never won the iPod. Nobody won 00:06:22.199 --> 00:06:24.560 the iPod. That's the thing. But that was their 00:06:24.560 --> 00:06:26.540 business. They understood attention and they 00:06:26.540 --> 00:06:29.199 understood databases. So these digital marketers 00:06:29.199 --> 00:06:31.600 are sitting in their office in Los Angeles and 00:06:31.600 --> 00:06:35.000 they see Friendster blowing up. They see everyone 00:06:35.000 --> 00:06:37.600 in the office trying to use Friendster and everyone 00:06:37.600 --> 00:06:39.579 complaining about it. So they see Friendster 00:06:39.579 --> 00:06:42.399 and they see two things. First, they see the 00:06:42.399 --> 00:06:45.500 incredible viral potential. But second, because 00:06:45.500 --> 00:06:48.240 they're technical guys, they see the flaw. They 00:06:48.240 --> 00:06:50.230 see that Friendster is broken. They realized 00:06:50.230 --> 00:06:52.310 they could clone the features, profiles, photos, 00:06:52.550 --> 00:06:55.470 connections, comments, but fix the engine. They 00:06:55.470 --> 00:06:57.329 wanted to take the concept of Friendster but 00:06:57.329 --> 00:07:00.250 make it actually, you know, load. And this leads 00:07:00.250 --> 00:07:02.889 us to the 10 -day sprint. This is one of those 00:07:02.889 --> 00:07:05.230 stats that just blows my mind every single time 00:07:05.230 --> 00:07:07.569 I read it. The sources say the first working 00:07:07.569 --> 00:07:10.029 version of MySpace was built and ready for launch 00:07:10.029 --> 00:07:13.769 in just 10 days. 10? Days, that is an absurd 00:07:13.769 --> 00:07:16.129 speed. I mean, even today with all our AI tools 00:07:16.129 --> 00:07:18.750 and frameworks, launching a full social network 00:07:18.750 --> 00:07:22.310 in 10 days is a ridiculously heavy lift. Back 00:07:22.310 --> 00:07:24.730 then, it was completely unheard of. How is that 00:07:24.730 --> 00:07:26.930 even possible from a coding perspective? What 00:07:26.930 --> 00:07:29.329 were they doing so differently? Well, it all 00:07:29.329 --> 00:07:31.449 comes down to the tech stack. This is a crucial 00:07:31.449 --> 00:07:33.449 detail that often gets overlooked in the sort 00:07:33.449 --> 00:07:36.290 of pop history version of this story. Friendster 00:07:36.290 --> 00:07:38.389 was built using something called Java server 00:07:38.389 --> 00:07:41.550 pages or JSP. OK, let's get a little technical 00:07:41.550 --> 00:07:43.430 for a second. Break that down for us. What is 00:07:43.430 --> 00:07:47.199 JSP? At the time, Java was considered the gold 00:07:47.199 --> 00:07:50.339 standard for serious enterprise -level software. 00:07:50.620 --> 00:07:53.500 It's robust. It's strict. It's very scalable 00:07:53.500 --> 00:07:56.040 if you build it perfectly. But it's also really 00:07:56.040 --> 00:07:58.699 heavy. It takes a lot of code to do simple things. 00:07:58.899 --> 00:08:01.379 It requires a lot of server resources. So it's 00:08:01.379 --> 00:08:04.740 powerful but cumbersome. Exactly. And Friendster's 00:08:04.740 --> 00:08:07.060 implementation of JSP was just buckling under 00:08:07.060 --> 00:08:09.160 the load. Every time they wanted to change a 00:08:09.160 --> 00:08:12.120 feature or fix a bug, it was a massive engineering 00:08:12.120 --> 00:08:14.199 effort. It was like trying to turn... an aircraft 00:08:14.199 --> 00:08:17.139 carrier. So Frenster is trying to steer a cruise 00:08:17.139 --> 00:08:20.639 ship through a narrow canal. Right. A very slow, 00:08:20.699 --> 00:08:23.740 very heavy cruise ship. Meanwhile, the team at 00:08:23.740 --> 00:08:26.279 Universe, led technically by a guy named Krista 00:08:26.279 --> 00:08:28.360 Wolf and his team, they decided to go a completely 00:08:28.360 --> 00:08:30.519 different route. They didn't use the serious 00:08:30.519 --> 00:08:33.379 language. They used cold fusion. Cold fusion. 00:08:33.500 --> 00:08:35.860 Now that is a name I have not heard in a very, 00:08:35.899 --> 00:08:39.039 very long time. It sounds like a nuclear physics 00:08:39.039 --> 00:08:42.120 term or maybe a bad 80s sci -fi movie. It does. 00:08:42.220 --> 00:08:44.580 It's a bit of a relic now. But back in 2003, 00:08:44.879 --> 00:08:47.019 Cold Fusion was designed for exactly what its 00:08:47.019 --> 00:08:49.960 name implies, rapid reaction. It was a scripting 00:08:49.960 --> 00:08:51.899 language built for rapid application development. 00:08:52.139 --> 00:08:54.559 So like a quick and dirty way to build a website. 00:08:54.970 --> 00:08:57.330 Kind of. Think of it like this. If Friendster 00:08:57.330 --> 00:08:59.669 was building a house by handcrafting every single 00:08:59.669 --> 00:09:02.370 brick from clay and letting it kiln dry for days, 00:09:02.610 --> 00:09:06.149 Myspace was building a house using giant prefabricated 00:09:06.149 --> 00:09:08.929 concrete blocks and a staple gun. It's faster, 00:09:09.009 --> 00:09:11.899 but maybe a little uglier and less stable. Exactly. 00:09:12.519 --> 00:09:15.360 ColdFusion allowed them to build dynamic, database 00:09:15.360 --> 00:09:18.899 -driven pages incredibly quickly. It was easier 00:09:18.899 --> 00:09:21.980 to write, easier to change, and allowed for much, 00:09:22.039 --> 00:09:25.259 much faster iteration. But computer scientists, 00:09:25.639 --> 00:09:27.679 the purists, they usually look down on it. It 00:09:27.679 --> 00:09:29.779 was considered dirty code. It wasn't elegant. 00:09:30.000 --> 00:09:32.200 It wasn't proper engineering. But it worked. 00:09:32.440 --> 00:09:34.720 But it worked. While Friendster engineers were 00:09:34.720 --> 00:09:36.860 losing sleep trying to optimize their Java code 00:09:36.860 --> 00:09:39.600 just to shave milliseconds off load times, the 00:09:39.600 --> 00:09:41.470 MySpace team could just... throw five new features 00:09:41.470 --> 00:09:43.450 at the wall in a single afternoon. You want a 00:09:43.450 --> 00:09:45.250 music player? Boom, done. You want a top eight 00:09:45.250 --> 00:09:47.649 friends list? Boom, done. And this technical 00:09:47.649 --> 00:09:51.289 decision, this choice to use ColdFusion, it actually 00:09:51.289 --> 00:09:53.590 ended up shaping the entire culture of the site, 00:09:53.690 --> 00:09:55.929 didn't it? The sources mentioned that the messy 00:09:55.929 --> 00:09:58.289 look of MySpace wasn't entirely intentional at 00:09:58.289 --> 00:10:01.210 first. It was a byproduct of this move fast and 00:10:01.210 --> 00:10:03.789 break things architecture. This is the happy 00:10:03.789 --> 00:10:06.960 accident that defined a generation. Because ColdFusion 00:10:06.960 --> 00:10:09.000 was so permissive and the code was, let's say, 00:10:09.080 --> 00:10:12.000 somewhat loose, they didn't have strict validation 00:10:12.000 --> 00:10:14.100 on the About Me fields. What does that mean, 00:10:14.179 --> 00:10:16.539 strict validation? It means they didn't clean 00:10:16.539 --> 00:10:19.620 the input. They discovered that users could literally 00:10:19.620 --> 00:10:23.460 paste HTML and CSS code directly into their profile 00:10:23.460 --> 00:10:26.399 bio, and the browser would just render it. It 00:10:26.399 --> 00:10:29.360 would just display it. CSS standing for Cascading 00:10:29.360 --> 00:10:32.860 Style Sheets. The code that tells a website... 00:10:33.070 --> 00:10:35.690 what fonts and colors and backgrounds to use. 00:10:35.809 --> 00:10:37.990 Right. Normally, a site like Friendster would 00:10:37.990 --> 00:10:40.429 block that immediately. They would scrub the 00:10:40.429 --> 00:10:41.929 input. They would say, no, you can't change our 00:10:41.929 --> 00:10:43.370 font. You can't change our background color. 00:10:43.490 --> 00:10:46.450 This is our brand. You live in our house. Friendster 00:10:46.450 --> 00:10:49.330 wanted what we call a walled garden, a uniform, 00:10:49.610 --> 00:10:53.309 clean, safe experience. And MySpace just said, 00:10:53.429 --> 00:10:56.440 here are the keys to the house. MySpace's philosophy, 00:10:56.700 --> 00:10:58.980 partly because they were moving so fast and partly 00:10:58.980 --> 00:11:01.480 because of who Tom was, was basically, let them 00:11:01.480 --> 00:11:04.440 do it. If you want to paste a block of code that 00:11:04.440 --> 00:11:06.860 makes your background a tiling image of glittery 00:11:06.860 --> 00:11:09.820 skulls, go for it. I remember the glittery skulls. 00:11:09.820 --> 00:11:11.779 If it breaks the layout for someone with a smaller 00:11:11.779 --> 00:11:13.600 monitor, well, that's not our problem. If it 00:11:13.600 --> 00:11:15.820 makes the text completely unreadable against 00:11:15.820 --> 00:11:18.519 your background, that's your choice. It became 00:11:18.519 --> 00:11:21.169 the Wild West. But that was the appeal, wasn't 00:11:21.169 --> 00:11:23.549 it? That chaos was the point. It was creative 00:11:23.549 --> 00:11:25.789 ownership. You didn't just fill out a form on 00:11:25.789 --> 00:11:28.129 MySpace. You built your space. It felt like your 00:11:28.129 --> 00:11:30.330 room in your parents' house. You could put whatever 00:11:30.330 --> 00:11:32.309 posters you want on the wall. You could paint 00:11:32.309 --> 00:11:34.529 the ceiling black. You could play your music 00:11:34.529 --> 00:11:37.610 way too loud. That is a perfect analogy. Friendster 00:11:37.610 --> 00:11:40.730 was a hotel room, clean, standard, completely 00:11:40.730 --> 00:11:43.470 impersonal. MySpace was your teenage bedroom. 00:11:44.090 --> 00:11:48.769 Messy, loud, and totally... 100 % yours. And 00:11:48.769 --> 00:11:51.250 for a teenager in 2004, that feeling of ownership 00:11:51.250 --> 00:11:54.110 was addictive. You would spend hours and hours 00:11:54.110 --> 00:11:56.429 tweaking your code just to get the perfect border 00:11:56.429 --> 00:11:59.070 around your profile picture. Okay, so we have 00:11:59.070 --> 00:12:02.460 the text stack. We have the chaotic vibe. But 00:12:02.460 --> 00:12:04.799 we still need users. And this goes back to Universe 00:12:04.799 --> 00:12:07.340 being a marketing company. They didn't have to 00:12:07.340 --> 00:12:09.620 suffer through the cold start problem, did they? 00:12:09.740 --> 00:12:12.179 The cold start problem is the death of most social 00:12:12.179 --> 00:12:14.379 networks. It's a killer. You launch a platform. 00:12:14.559 --> 00:12:17.259 Nobody's there. So nobody joins because, well, 00:12:17.379 --> 00:12:19.299 nobody is there. It's a chicken and egg problem. 00:12:19.460 --> 00:12:23.139 Right. And MySpace cheated. Or rather, they use 00:12:23.139 --> 00:12:26.210 their massive unfair advantage. The email list. 00:12:26.389 --> 00:12:30.370 Universe had a database of 20 million email subscribers 00:12:30.370 --> 00:12:33.490 from their other ventures. Remember, these are 00:12:33.490 --> 00:12:35.350 the people who signed up for punch the monkey 00:12:35.350 --> 00:12:38.070 or win a free vacation. 20 million. I mean, that 00:12:38.070 --> 00:12:40.570 is the size of a nation state of people. So on 00:12:40.570 --> 00:12:42.990 day one, or at least in that first week, they 00:12:42.990 --> 00:12:45.730 could send out a massive email blast. Hey, check 00:12:45.730 --> 00:12:48.389 out this new site. They forced viral growth. 00:12:48.750 --> 00:12:51.090 They lit a match and then poured a giant bucket 00:12:51.090 --> 00:12:53.889 of gasoline on it immediately. They didn't wait 00:12:53.889 --> 00:12:56.110 for word of mouth. They manufactured it. The 00:12:56.110 --> 00:12:58.370 sources also mentioned they gamified it internally 00:12:58.370 --> 00:13:00.950 within the company. They did. They held contests 00:13:00.950 --> 00:13:03.110 in the L .A. office. Who can get the most people 00:13:03.110 --> 00:13:05.590 to sign up? They were bringing people into the 00:13:05.590 --> 00:13:08.669 office parties, models, DJs, club promoters, 00:13:08.710 --> 00:13:10.950 and taking photos of them and then saying, hey, 00:13:11.049 --> 00:13:13.250 to see these photos, you have to log into MySpace. 00:13:13.509 --> 00:13:15.950 That is classic growth hacking before the term 00:13:15.950 --> 00:13:17.950 growth hacking even existed. It's brilliant. 00:13:18.210 --> 00:13:20.730 It was incredibly aggressive, but it worked. 00:13:20.789 --> 00:13:22.950 It populated the site with cool people right 00:13:22.950 --> 00:13:25.330 from the start. There's another sliding doors 00:13:25.330 --> 00:13:27.610 moment in this early phase that I think is so 00:13:27.610 --> 00:13:30.549 critical. The dispute over the business model. 00:13:30.669 --> 00:13:32.610 This could have gone a completely different way. 00:13:32.690 --> 00:13:35.110 This part is fascinating to me. So Chris DeWolf, 00:13:35.250 --> 00:13:37.870 the CEO, looked at what they had built. And essentially 00:13:37.870 --> 00:13:40.950 it was file storage. Hosting photos costs money. 00:13:41.549 --> 00:13:43.830 Bandwidth costs money. Servers cost money. So 00:13:43.830 --> 00:13:45.830 he suggested maybe we should charge a subscription 00:13:45.830 --> 00:13:49.389 fee. Like a dating site. Maybe five or ten bucks 00:13:49.389 --> 00:13:53.139 a month. Can you even imagine? If MySpace had 00:13:53.139 --> 00:13:56.519 been behind a paywall in 2003. It would be a 00:13:56.519 --> 00:13:58.840 footnote in history. Nobody would have joined. 00:13:58.980 --> 00:14:00.659 We would probably be talking about Friendster 00:14:00.659 --> 00:14:02.860 today or maybe some other site that came along. 00:14:03.080 --> 00:14:05.399 But Brad Greenspan, who was the chair of Universe, 00:14:05.700 --> 00:14:08.500 he vetoed it. He slammed the door on that idea. 00:14:08.639 --> 00:14:11.159 He understood the network effect. He knew that 00:14:11.159 --> 00:14:13.299 to build a real community, you need zero friction. 00:14:13.480 --> 00:14:15.259 You have to let everyone in. It seems so obvious 00:14:15.259 --> 00:14:18.080 now. I mean, Facebook, Instagram, TikTok, they're 00:14:18.080 --> 00:14:21.570 all free. But back then. The freemium model wasn't 00:14:21.570 --> 00:14:24.309 really the standard. No, not at all. Paying for 00:14:24.309 --> 00:14:27.289 online services was common. AOL cost money. Match 00:14:27.289 --> 00:14:30.149 .com cost money. So Greenspan's decision to keep 00:14:30.149 --> 00:14:32.450 it free and ad -supported was the catalyst that 00:14:32.450 --> 00:14:34.350 allowed that viral growth to just go nuclear. 00:14:34.629 --> 00:14:36.950 So we have the engine, the fuel, and the open 00:14:36.950 --> 00:14:39.590 road. But we also have driver. We have a face. 00:14:39.750 --> 00:14:42.809 We have Tom. Everyone knows the photo. The whiteboard. 00:14:42.929 --> 00:14:45.690 The smile. The looking back over the shoulder. 00:14:46.250 --> 00:14:48.470 But the sources give us this incredible backstory 00:14:48.470 --> 00:14:51.250 that I honestly had absolutely no idea about. 00:14:51.629 --> 00:14:54.730 We need to talk about Lord Flathead. This is 00:14:54.730 --> 00:14:57.210 where the story just turns into a bit of a techno 00:14:57.210 --> 00:14:59.710 thriller. Tom Anderson wasn't just a smiling 00:14:59.710 --> 00:15:02.350 face in a T -shirt. He wasn't just a generic 00:15:02.350 --> 00:15:05.730 tech bro. In his teenage years living in Escondido, 00:15:05.769 --> 00:15:08.789 California, he was a legitimate high -level computer 00:15:08.789 --> 00:15:11.250 hacker. Lord Flathead. That was his handle, his 00:15:11.250 --> 00:15:13.570 online name. That was his pseudonym in the hacker 00:15:13.570 --> 00:15:15.750 underground. And he wasn't just, you know, defacing 00:15:15.750 --> 00:15:18.269 school websites or changing his grades. In the 00:15:18.269 --> 00:15:20.490 mid -1980s, he hacked into the computer system 00:15:20.490 --> 00:15:23.330 of Chase Manhattan Bank. Wait, a major global 00:15:23.330 --> 00:15:25.750 financial institution. That is not child's play. 00:15:25.909 --> 00:15:29.789 No, we're talking about a massive bank. He navigated 00:15:29.789 --> 00:15:32.850 their security, got deep into the system, and 00:15:32.850 --> 00:15:35.250 he showed his friends. He created a fake account. 00:15:35.409 --> 00:15:37.950 He was just exploring the mainframe of this huge 00:15:37.950 --> 00:15:40.580 corporation. I know. And then the FBI showed 00:15:40.580 --> 00:15:43.860 up. An FBI raid. Seriously. Their sources confirm 00:15:43.860 --> 00:15:48.220 it. A full FBI raid on his parents' house. Can 00:15:48.220 --> 00:15:51.000 you imagine being a teenager in Escondido and 00:15:51.000 --> 00:15:53.299 having federal agents knocking on your door, 00:15:53.379 --> 00:15:55.600 seizing your computers? That's terrifying. Because 00:15:55.600 --> 00:15:57.659 he was a minor at the time. He was just a teenager. 00:15:57.940 --> 00:16:00.580 He was spared the harshest punishments like federal 00:16:00.580 --> 00:16:03.100 prison. But his equipment was seized. He was 00:16:03.100 --> 00:16:05.340 put on probation. This was a serious federal 00:16:05.340 --> 00:16:07.919 incident. He was almost prosecuted under these 00:16:07.919 --> 00:16:09.840 new hacking laws that were just coming into effect. 00:16:09.879 --> 00:16:12.360 That is just wild. So the guy who created the 00:16:12.360 --> 00:16:14.340 friendliest, most open place on the Internet, 00:16:14.500 --> 00:16:16.899 the guy who was everyone's first friend, started 00:16:16.899 --> 00:16:19.779 out as a black hat hacker breaking into banks. 00:16:19.980 --> 00:16:22.519 It creates this fascinating contrast, doesn't 00:16:22.519 --> 00:16:25.279 it? On one hand, you have the corporate image 00:16:25.279 --> 00:16:30.559 of MySpace -friendly, open, safe -ish. On the 00:16:30.559 --> 00:16:33.240 other, the actual DNA of the founder is someone 00:16:33.240 --> 00:16:36.220 who deeply understands systems, who understands 00:16:36.220 --> 00:16:39.639 how to break rules, and who has a profound technical 00:16:39.639 --> 00:16:42.259 literacy. It explains so much about the product 00:16:42.259 --> 00:16:44.100 philosophy we talked about earlier. The whole 00:16:44.100 --> 00:16:46.960 allow the users to hack their own profiles thing. 00:16:47.159 --> 00:16:48.580 Yeah. That feels like a hacker's philosophy. 00:16:49.039 --> 00:16:51.240 Exactly. Here's the code. Do what you want with 00:16:51.240 --> 00:16:54.659 it. A walled garden like Friendster or later 00:16:54.659 --> 00:16:57.240 Facebook is a very corporate idea. It says we 00:16:57.240 --> 00:16:59.779 control the experience. Tom's approach was more 00:16:59.779 --> 00:17:02.320 like the system is yours to manipulate. It's 00:17:02.320 --> 00:17:04.400 very anti -establishment, even though it became 00:17:04.400 --> 00:17:06.599 this billion dollar establishment. But the corporate 00:17:06.599 --> 00:17:08.680 world didn't always love that approach, did they? 00:17:08.759 --> 00:17:11.299 No. Not at all. There is a very telling quote 00:17:11.299 --> 00:17:13.140 in the source material from a News Corp executive 00:17:13.140 --> 00:17:15.660 later on after the acquisition. They described 00:17:15.660 --> 00:17:19.160 Tom not as a visionary, but as a complete bottleneck. 00:17:19.180 --> 00:17:22.279 Ouch. Why a bottleneck? That's a harsh word. 00:17:22.670 --> 00:17:25.009 Because he cared too much about the product details, 00:17:25.309 --> 00:17:27.490 he didn't want to just ship features to make 00:17:27.490 --> 00:17:29.910 money. He wanted the product to feel right. He 00:17:29.910 --> 00:17:32.289 was deeply protective of the community and the 00:17:32.289 --> 00:17:35.190 user experience. In the corporate world, wanting 00:17:35.190 --> 00:17:38.130 to refine a feature rather than just launching 00:17:38.130 --> 00:17:41.190 it immediately to juice revenue numbers, that 00:17:41.190 --> 00:17:44.750 is seen as obstruction. He was the no man in 00:17:44.750 --> 00:17:47.150 a company of yes men. It's a classic tension, 00:17:47.269 --> 00:17:49.109 right? The creative founder versus the suits. 00:17:49.250 --> 00:17:51.210 And speaking of the suits, we are now moving 00:17:51.210 --> 00:17:54.849 into the era. of big, big money. Section three, 00:17:54.990 --> 00:17:58.430 the peak. The year is 2005. MySpace is growing 00:17:58.430 --> 00:18:01.430 exponentially. We are talking 16 million monthly 00:18:01.430 --> 00:18:04.250 users by the middle of 2005. It is the hottest 00:18:04.250 --> 00:18:05.890 thing on the entire internet. It's where culture 00:18:05.890 --> 00:18:07.569 is happening. Bands are breaking on MySpace. 00:18:07.809 --> 00:18:10.369 Trends are starting there. Tila Tequila is happening. 00:18:10.609 --> 00:18:12.549 And naturally, the media giants start circling. 00:18:12.549 --> 00:18:14.170 They see the eyeballs. They see the engagement. 00:18:14.630 --> 00:18:16.829 And they want to own it. It turns into a bidding 00:18:16.829 --> 00:18:19.430 war. On one side, you have Viacom. They own MTV. 00:18:20.089 --> 00:18:22.410 Which feels like the natural home, right? MySpace 00:18:22.410 --> 00:18:24.869 was all about music. MTV was music television. 00:18:24.890 --> 00:18:27.150 It fits perfectly. It would have been a perfect 00:18:27.150 --> 00:18:30.269 cultural fit. You can just imagine it. MTV could 00:18:30.269 --> 00:18:33.269 have integrated MySpace into TRL and their other 00:18:33.269 --> 00:18:36.250 shows. It made so much sense. But then Rupert 00:18:36.250 --> 00:18:37.950 Murdoch and News Corporation come in from the 00:18:37.950 --> 00:18:41.509 top rope. They dropped $580 million. $580 million 00:18:41.509 --> 00:18:45.420 in cash. At the time, Silicon Valley was shocked. 00:18:45.599 --> 00:18:47.720 They thought Murdoch had massively overpaid. 00:18:47.900 --> 00:18:51.400 They thought he was crazy. But very, very quickly, 00:18:51.559 --> 00:18:53.900 it looked like the bargain of the century. Within 00:18:53.900 --> 00:18:56.299 a year, analysts were saying MySpace was worth 00:18:56.299 --> 00:18:58.400 triple that amount. It looked like Murdoch had 00:18:58.400 --> 00:19:01.480 pulled off a masterstroke. He beat Viacom. He 00:19:01.480 --> 00:19:03.619 owned the Internet's biggest property. He was 00:19:03.619 --> 00:19:06.480 the king of old media and new media. But there 00:19:06.480 --> 00:19:09.019 is a painful what -if moment right around here, 00:19:09.140 --> 00:19:11.500 a major fork in the road. The Facebook meeting. 00:19:11.660 --> 00:19:15.190 Yes. In February 2005, just before the News Corp 00:19:15.190 --> 00:19:17.630 sale, a young Mark Zuckerberg met with Chris 00:19:17.630 --> 00:19:20.089 DeWolf. Facebook was just a college directory 00:19:20.089 --> 00:19:21.930 at that point. It wasn't open to the public yet, 00:19:22.029 --> 00:19:25.089 but it was growing like a weed on campuses. And 00:19:25.089 --> 00:19:27.089 Zuckerberg offered to sell Facebook to MySpace. 00:19:27.490 --> 00:19:31.170 That was the asking price. $75 million. $75 million 00:19:31.170 --> 00:19:34.200 for Facebook. That's unbelievable to even say 00:19:34.200 --> 00:19:37.220 out loud. I mean, today, Facebook or Meta is 00:19:37.220 --> 00:19:38.940 worth, what, hundreds and hundreds of billions? 00:19:39.140 --> 00:19:41.539 And D. Wolf said no. He passed. He passed on 00:19:41.539 --> 00:19:44.000 it. Now, we have to be fair. We have to look 00:19:44.000 --> 00:19:48.119 at this with 2005 eyes, not 2026 eyes. Sure. 00:19:48.240 --> 00:19:52.160 Hindsight is 20 -20. In 2005, $75 million for 00:19:52.160 --> 00:19:54.640 a college directory when you are the undisputed 00:19:54.640 --> 00:19:57.740 king of the world. It seems high. D. Wolf probably 00:19:57.740 --> 00:20:00.509 thought... Why would we buy them? We are crushing 00:20:00.509 --> 00:20:03.009 them. We have 16 million users. They have a fraction 00:20:03.009 --> 00:20:05.089 of that. We can just crush them. We can launch 00:20:05.089 --> 00:20:07.630 MySpace College tomorrow and wipe them out. Hubris. 00:20:07.910 --> 00:20:10.589 It's a powerful, powerful drug. It is the fatal 00:20:10.589 --> 00:20:12.670 flaw in almost every single business tragedy. 00:20:13.349 --> 00:20:15.089 Underestimating the scrappy competitor, thinking 00:20:15.089 --> 00:20:17.670 you are invincible just because you're big. So 00:20:17.670 --> 00:20:20.230 News Corp owns MySpace. They are riding high. 00:20:20.509 --> 00:20:23.430 And then in August 2006, they signed the deal. 00:20:24.079 --> 00:20:26.700 The deal that many experts, including the ones 00:20:26.700 --> 00:20:29.059 in our sources, say was the real beginning of 00:20:29.059 --> 00:20:31.539 the end. The Google deal. This is the golden 00:20:31.539 --> 00:20:34.059 handcuffs. Explain the terms for us, because 00:20:34.059 --> 00:20:37.220 on the surface, $900 million sounds like an absolute 00:20:37.220 --> 00:20:40.880 win. It was a $900 million deal spread over three 00:20:40.880 --> 00:20:44.309 years. In exchange, Google gets exclusive rights 00:20:44.309 --> 00:20:46.569 to provide search results and, more importantly, 00:20:46.809 --> 00:20:49.549 advertisements on MySpace. On paper, that sounds 00:20:49.549 --> 00:20:52.250 amazing. They just bought the company for $580 00:20:52.250 --> 00:20:55.450 million, and now they are getting $900 million 00:20:55.450 --> 00:20:58.369 just for letting Google put some ads up. It's 00:20:58.369 --> 00:21:00.029 pure profit. They've already made their money 00:21:00.029 --> 00:21:01.930 back, and then some. That's exactly how News 00:21:01.930 --> 00:21:05.029 Corp saw it. We won. We are business geniuses. 00:21:05.690 --> 00:21:08.769 But there was a catch, a huge catch. The deal 00:21:08.769 --> 00:21:11.450 had very strict performance targets. To get that 00:21:11.450 --> 00:21:14.670 full $900 million payout, MySpace had to generate 00:21:14.670 --> 00:21:17.390 a specific massive number of ad impressions and 00:21:17.390 --> 00:21:20.009 searches every quarter. Ah, so they had a quota. 00:21:20.170 --> 00:21:22.950 A massive unyielding quota. And this is the so 00:21:22.950 --> 00:21:25.109 what of the entire story. This is the mechanism 00:21:25.109 --> 00:21:27.349 of the downfall. To hit those numbers, MySpace 00:21:27.349 --> 00:21:29.589 had to turn the entire site into a giant blinking 00:21:29.589 --> 00:21:32.210 billboard. They needed more pages, more pop -ups, 00:21:32.250 --> 00:21:34.990 more banner ads, more everything. Exactly. They 00:21:34.990 --> 00:21:36.789 couldn't just have a clean profile page anymore. 00:21:36.930 --> 00:21:39.410 They needed to shove three banner ads, a sponsored 00:21:39.410 --> 00:21:41.529 search bar, and a pop -up video right into the 00:21:41.529 --> 00:21:44.250 user's face. They had to break up content onto 00:21:44.250 --> 00:21:46.809 multiple pages just to get more clicks and serve 00:21:46.809 --> 00:21:50.269 more ads. I remember this era so vividly. The 00:21:50.269 --> 00:21:52.750 site became physically slower. It was heavy. 00:21:52.890 --> 00:21:56.069 My browser would crash all the time. And it was 00:21:56.069 --> 00:21:58.589 just ugly. It felt like walking into Times Square, 00:21:58.690 --> 00:22:00.650 but everything is screaming at you at once. It 00:22:00.650 --> 00:22:02.990 was just clutter. Visual noise. And this is the 00:22:02.990 --> 00:22:05.940 crucial context. While MySpace was busy trying 00:22:05.940 --> 00:22:08.720 to please News Corp and Google by jamming ads 00:22:08.720 --> 00:22:11.460 into every available pixel, what was Facebook 00:22:11.460 --> 00:22:14.619 doing? Facebook was clean. So clean. Blue and 00:22:14.619 --> 00:22:17.940 white. No clutter. Minimalist. Fast. And focused 00:22:17.940 --> 00:22:20.640 entirely on user engagement, not ad impressions. 00:22:21.359 --> 00:22:23.339 Facebook wasn't trying to sell you a ringtone. 00:22:23.500 --> 00:22:25.420 They were trying to help you find your friend 00:22:25.420 --> 00:22:27.720 from high school. They were trying to help you 00:22:27.720 --> 00:22:29.940 tag a photo of your friends from the party last 00:22:29.940 --> 00:22:31.900 night. It's a fundamental difference in strategy, 00:22:32.099 --> 00:22:34.930 isn't it? MySpace was optimizing for revenue 00:22:34.930 --> 00:22:37.950 to satisfy a corporate contract. Facebook was 00:22:37.950 --> 00:22:40.769 optimizing for utility to satisfy the user. And 00:22:40.769 --> 00:22:43.819 in the long run, the user always always wins. 00:22:44.059 --> 00:22:46.619 A former executive mentioned in the sources that 00:22:46.619 --> 00:22:48.779 they were paralyzed. They couldn't clean up the 00:22:48.779 --> 00:22:51.079 site design because if they removed an ad slot 00:22:51.079 --> 00:22:53.140 to make the page look better and load faster, 00:22:53.359 --> 00:22:55.660 they would miss their revenue target and lose 00:22:55.660 --> 00:22:57.799 the Google money. They were completely trapped 00:22:57.799 --> 00:23:00.660 by their own success. They sold their user experience 00:23:00.660 --> 00:23:04.059 for $900 million. They took the short -term cash 00:23:04.059 --> 00:23:07.400 and in doing so, they sacrificed the long -term 00:23:07.400 --> 00:23:10.039 viability of the entire product. That sits the 00:23:10.039 --> 00:23:12.930 stage perfectly for section four, the fall. We're 00:23:12.930 --> 00:23:15.509 looking at 2008 and 2009 now. This is where the 00:23:15.509 --> 00:23:18.230 lines on the graph finally cross. The data points 00:23:18.230 --> 00:23:21.069 from this period are just brutal. In April 2008, 00:23:21.369 --> 00:23:23.569 Facebook overtakes MySpace and Alexa rankings 00:23:23.569 --> 00:23:26.789 globally for the first time. By May 2009, Facebook 00:23:26.789 --> 00:23:29.450 has more unique U .S. visitors. The king is dead. 00:23:29.789 --> 00:23:31.630 Why did it happen so fast, though? We talked 00:23:31.630 --> 00:23:33.130 about the ads, but there was a deeper strategic 00:23:33.130 --> 00:23:35.250 difference, too, right? The sources talk about 00:23:35.250 --> 00:23:37.170 the portal strategy versus the network strategy. 00:23:37.430 --> 00:23:39.509 This is a bit of business theory, but it's so 00:23:39.509 --> 00:23:41.529 crucial to understanding the Internet at that 00:23:41.529 --> 00:23:45.400 time. MySpace, under News Corp's direction, tried 00:23:45.400 --> 00:23:48.640 to become a portal. Like Yahoo or AOL in the 00:23:48.640 --> 00:23:51.660 90s. Exactly. They wanted to be a destination 00:23:51.660 --> 00:23:54.619 where you go to consume content. They launched 00:23:54.619 --> 00:23:58.119 MySpace TV, MySpace Records, MySpace News. They 00:23:58.119 --> 00:24:00.240 wanted you to come to MySpace to watch celebrity 00:24:00.240 --> 00:24:02.859 gossip videos and listen to the new Britney Spears 00:24:02.859 --> 00:24:05.299 single. They wanted to be an entertainment hub. 00:24:05.519 --> 00:24:08.289 They wanted to be a TV station. Or a magazine. 00:24:08.490 --> 00:24:11.829 Right. But Facebook focused on being a utility. 00:24:12.430 --> 00:24:14.150 A communication network. They weren't trying 00:24:14.150 --> 00:24:16.549 to sell you a band or a video. They were trying 00:24:16.549 --> 00:24:19.089 to reduce the friction of talking to people. 00:24:19.269 --> 00:24:21.410 They introduced the news feed. They introduced 00:24:21.410 --> 00:24:23.769 photo tagging. They made it easier to be social. 00:24:23.990 --> 00:24:26.349 They were adding quality of life features. That's 00:24:26.349 --> 00:24:28.509 the perfect way to put it. MySpace added features 00:24:28.509 --> 00:24:31.069 to improve entertainment consumption. Facebook 00:24:31.069 --> 00:24:33.029 added features to improve social connection. 00:24:33.369 --> 00:24:35.829 And it turns out, on a social network, people 00:24:35.829 --> 00:24:38.130 want to be social. They don't just want to be 00:24:38.130 --> 00:24:40.599 broadcast at. It's a shocking concept, I know. 00:24:40.799 --> 00:24:42.920 But there was another factor driving people away, 00:24:43.099 --> 00:24:45.960 and it is a dark one. We have to talk about the 00:24:45.960 --> 00:24:48.700 safety crisis. The sources use a very intense 00:24:48.700 --> 00:24:50.940 phrase here, one that really stuck with me, vortex 00:24:50.940 --> 00:24:54.019 of perversion. That phrase sounds like something 00:24:54.019 --> 00:24:56.779 from a Victorian moral panic pamphlet. It actually 00:24:56.779 --> 00:24:59.160 comes from Richard Blumenthal, who was the attorney 00:24:59.160 --> 00:25:01.700 general of Connecticut at the time. There was 00:25:01.700 --> 00:25:04.539 this massive moral panic that swept the media 00:25:04.539 --> 00:25:07.960 in 2006 and 2007. I remember the news reports. 00:25:08.589 --> 00:25:12.309 all the Dateline NBC style stuff to catch a predator. 00:25:13.029 --> 00:25:15.650 The dominant narrative was that MySpace was a 00:25:15.650 --> 00:25:18.369 hunting ground for adults targeting minors. And 00:25:18.369 --> 00:25:20.410 to be fair, there were legitimate issues because 00:25:20.410 --> 00:25:22.750 MySpace allowed anonymity. Remember, you could 00:25:22.750 --> 00:25:26.349 be Lord Flathead or Sparkle Pony 2000. And because 00:25:26.349 --> 00:25:29.009 the age verification was very loose, it was incredibly 00:25:29.009 --> 00:25:31.369 difficult to police. The spam filters were weak. 00:25:31.470 --> 00:25:34.529 It just felt unsafe. It felt creepy. You would 00:25:34.529 --> 00:25:36.890 get messages from bots or from people who clearly 00:25:36.890 --> 00:25:38.809 weren't who they said they were. And Facebook, 00:25:39.049 --> 00:25:41.150 from the very beginning, required real names. 00:25:41.329 --> 00:25:44.029 That was the killer differentiator. At first, 00:25:44.029 --> 00:25:46.730 you needed a .edu email address, which meant 00:25:46.730 --> 00:25:49.329 you were a real college student. Then, even when 00:25:49.329 --> 00:25:51.390 they opened it up to everyone, they enforced 00:25:51.390 --> 00:25:54.529 a real -name policy. It created a sense of accountability. 00:25:54.930 --> 00:25:57.900 It created trust. For parents and for users who 00:25:57.900 --> 00:25:59.839 were just tired of random spam bots and creepy 00:25:59.839 --> 00:26:03.619 messages, Facebook became the sanctuary. The 00:26:03.619 --> 00:26:06.599 vortex of perversion label stuck to MySpace like 00:26:06.599 --> 00:26:10.200 tar, and it drove the key 18 to 24 -year -old 00:26:10.200 --> 00:26:13.279 demographic away in droves. They graduated from 00:26:13.279 --> 00:26:15.740 the chaotic high school playground of MySpace 00:26:15.740 --> 00:26:19.339 to the safer, cleaner college campus of Facebook. 00:26:19.660 --> 00:26:21.319 Now, before we move to the total collapse, there 00:26:21.319 --> 00:26:23.079 is one more theory mentioned in the sources that 00:26:23.079 --> 00:26:25.599 I find fascinating. The calculated takedown theory. 00:26:25.950 --> 00:26:27.950 This comes from Tim Vanderhoek, who was a later 00:26:27.950 --> 00:26:30.769 CEO of MySpace after the fall. Right. This is 00:26:30.769 --> 00:26:32.750 a little bit of a conspiracy theory, but it has 00:26:32.750 --> 00:26:35.769 some strong business logic behind it. He alleges 00:26:35.769 --> 00:26:38.029 that Google actually used its acquisition of 00:26:38.029 --> 00:26:40.509 YouTube to systematically kill MySpace. Walk 00:26:40.509 --> 00:26:42.109 us through that, because MySpace and Google were 00:26:42.109 --> 00:26:44.089 partners, right? They had the $900 million deal. 00:26:44.329 --> 00:26:46.910 They were partners on paper. But you have to 00:26:46.910 --> 00:26:50.089 remember, Myspace's lifeblood, especially with 00:26:50.089 --> 00:26:54.009 musicians, was music and video. It was the place 00:26:54.009 --> 00:26:56.490 for bands. If you wanted to hear the new song 00:26:56.490 --> 00:26:58.829 by the Killers, you went to their Myspace page. 00:26:59.029 --> 00:27:01.769 Right. The Myspace music player. was iconic. 00:27:02.089 --> 00:27:04.750 Vanderhook argues that Google, once they bought 00:27:04.750 --> 00:27:08.950 YouTube for $1 .65 billion, started manipulating 00:27:08.950 --> 00:27:11.369 its own search results. They started steering 00:27:11.369 --> 00:27:14.490 all search traffic for music and video away from 00:27:14.490 --> 00:27:17.309 MySpace and towards YouTube, effectively starving 00:27:17.309 --> 00:27:19.869 MySpace of its main attraction. So if you search 00:27:19.869 --> 00:27:22.130 for a band on Google, instead of their MySpace 00:27:22.130 --> 00:27:25.049 page popping up first, which you used to, the 00:27:25.049 --> 00:27:26.970 YouTube link for their music video would pop 00:27:26.970 --> 00:27:29.549 up. Precisely. And since MySpace was locked into 00:27:29.549 --> 00:27:31.759 that deal where Google provided their on -site 00:27:31.759 --> 00:27:33.359 search as well, they were essentially partnered 00:27:33.359 --> 00:27:35.500 with the very company that was cutting off their 00:27:35.500 --> 00:27:37.980 oxygen supply. They were paying the assassins. 00:27:38.000 --> 00:27:40.339 That is just ruthless corporate strategy. Whether 00:27:40.339 --> 00:27:42.940 it was a calculated takedown or just Google's 00:27:42.940 --> 00:27:45.740 algorithm naturally favoring its own superior 00:27:45.740 --> 00:27:48.539 video platform is up for debate. But the effect 00:27:48.539 --> 00:27:51.960 was exactly the same. MySpace lost its dominance 00:27:51.960 --> 00:27:54.480 in entertainment. YouTube became the video player 00:27:54.480 --> 00:27:57.839 of the internet. MySpace became, well... Nothing. 00:27:57.940 --> 00:28:01.099 So users are leaving in droves, advertisers are 00:28:01.099 --> 00:28:03.880 fleeing, the site is buggy and slow, it is 2011, 00:28:04.200 --> 00:28:07.039 the party is officially over. The exodus was 00:28:07.039 --> 00:28:10.039 brutal. In March 2011, the stats showed MySpace 00:28:10.039 --> 00:28:13.480 lost 10 million users in a single month. 10 million 00:28:13.480 --> 00:28:16.240 in a month. That is a free fall. That's an evacuation. 00:28:16.619 --> 00:28:18.500 That is not user churn. That is a full -blown 00:28:18.500 --> 00:28:21.099 disaster. It's a ghost town. And News Corp wants 00:28:21.099 --> 00:28:23.319 out. Rupert Murdoch, who had publicly called 00:28:23.319 --> 00:28:25.599 the purchase a huge mistake, puts it up for sale. 00:28:25.720 --> 00:28:27.440 He basically says, get this thing off my books. 00:28:27.480 --> 00:28:28.700 I don't care what we get for it. They bought 00:28:28.700 --> 00:28:31.319 it for $580 million. What did they sell it for? 00:28:31.559 --> 00:28:34.460 Approximately $35 million. Oh, my goodness. From 00:28:34.460 --> 00:28:36.950 $580 million down to $35 million. From a valuation 00:28:36.950 --> 00:28:38.970 peak of, at one point they thought it was worth 00:28:38.970 --> 00:28:42.869 $12 billion, down to selling for $35 million. 00:28:43.390 --> 00:28:46.569 That is just pennies on the dollar. It is a 99 00:28:46.569 --> 00:28:50.269 % loss of value. It is one of the biggest destructions 00:28:50.269 --> 00:28:52.390 of shareholder wealth in modern tech history. 00:28:52.630 --> 00:28:54.849 Who bought it? I mean, who would even buy a sinking 00:28:54.849 --> 00:28:57.349 ship like that? A company called Specific Media. 00:28:57.470 --> 00:29:00.589 And here's a fun fact. Justin Timberlake. JT. 00:29:00.730 --> 00:29:03.349 Yes. Justin Timberlake took an ownership stake. 00:29:03.569 --> 00:29:06.250 They tried to pivot purely into a music discovery 00:29:06.250 --> 00:29:08.589 platform, basically admitting defeat and saying, 00:29:08.670 --> 00:29:10.809 we aren't a social network anymore. We are a 00:29:10.809 --> 00:29:12.930 music site. We are going to be Spotify before 00:29:12.930 --> 00:29:15.470 Spotify. And it didn't work. It did not work. 00:29:15.809 --> 00:29:18.089 But that brings us to perhaps the most tragic 00:29:18.089 --> 00:29:21.809 part of this entire deep dive. Section six, the 00:29:21.809 --> 00:29:24.009 digital burning of Alexandria. This happened 00:29:24.009 --> 00:29:27.109 much later. This is 2019. By this point, MySpace 00:29:27.109 --> 00:29:30.029 is a complete zombie site. But it still holds 00:29:30.029 --> 00:29:32.730 this massive, invaluable archive. Millions of 00:29:32.730 --> 00:29:35.410 bands, garage bands, emo bands, hip hop artists. 00:29:35.529 --> 00:29:37.789 They all uploaded their tracks to MySpace from 00:29:37.789 --> 00:29:40.650 2003 to 2015. For many of them, it was the only 00:29:40.650 --> 00:29:43.289 copy they had. It was a time capsule of an entire 00:29:43.289 --> 00:29:46.430 era of music. And then the news breaks. A server 00:29:46.430 --> 00:29:49.250 migration gone wrong. Oops. Oops. Doesn't quite 00:29:49.250 --> 00:29:52.109 cover it. They announced that due to a technical 00:29:52.109 --> 00:29:54.910 error during a server move. All user content 00:29:54.910 --> 00:29:58.430 uploaded between 2003 and 2015 was wiped out, 00:29:58.470 --> 00:30:01.309 corrupted, gone forever. How much did we lose? 00:30:01.450 --> 00:30:03.970 Give me the scale of this. Over 50 million songs. 00:30:04.869 --> 00:30:08.730 50 million. That is a staggering number. That 00:30:08.730 --> 00:30:10.490 is more songs that are currently on Spotify. 00:30:10.730 --> 00:30:14.130 By 14 million different artists, plus all the 00:30:14.130 --> 00:30:16.329 photos, all the videos, all the angsty blog posts, 00:30:16.450 --> 00:30:19.029 gone. That is just devastating. I mean, think 00:30:19.029 --> 00:30:21.250 about the cultural history. The early demos of 00:30:21.250 --> 00:30:23.609 bands that became huge. My Chemical Romance, 00:30:23.650 --> 00:30:25.970 Katy Perry, Arctic Monkeys all started there. 00:30:26.089 --> 00:30:29.490 But maybe more importantly, the millions of bands 00:30:29.490 --> 00:30:32.059 that never made it. The local scenes, the high 00:30:32.059 --> 00:30:34.700 school bands, the bad poetry, all of it just 00:30:34.700 --> 00:30:37.099 deleted. There was a lot of skepticism at the 00:30:37.099 --> 00:30:39.059 time, as you can imagine. Some experts speculated, 00:30:39.140 --> 00:30:41.839 was this really a botched migration or did they 00:30:41.839 --> 00:30:44.180 just not want to pay the server costs to host 00:30:44.180 --> 00:30:46.859 50 million dead songs anymore? It is a convenient 00:30:46.859 --> 00:30:48.980 excuse, isn't it? Oh, no, we accidentally lost 00:30:48.980 --> 00:30:50.380 the data. We were paying millions of dollars 00:30:50.380 --> 00:30:53.059 at store. The official line remains a botched 00:30:53.059 --> 00:30:56.539 migration, but the result is the same. A massive 00:30:56.539 --> 00:30:59.460 chunk of early 2000s musical and internet culture 00:30:59.460 --> 00:31:01.839 just vanished overnight. It's like if a library 00:31:01.839 --> 00:31:03.920 burned down but nobody noticed for years until 00:31:03.920 --> 00:31:06.720 they tried to check out a book. But there is 00:31:06.720 --> 00:31:09.480 a tiny glimmer of hope. The Dragon Horde. Yes. 00:31:09.740 --> 00:31:12.819 The Internet Archive. the absolute heroes of 00:31:12.819 --> 00:31:14.880 the web. Bless them. Apparently, an anonymous 00:31:14.880 --> 00:31:17.559 academic group had been downloading MP3s from 00:31:17.559 --> 00:31:20.480 MySpace between 2008 and 2010 for some kind of 00:31:20.480 --> 00:31:22.720 research study. They had managed to grab about 00:31:22.720 --> 00:31:26.319 490 ,000 songs before they stopped. Okay, so 00:31:26.319 --> 00:31:28.740 half a million out of 50 million. It's 1%. It's 00:31:28.740 --> 00:31:31.700 1%, but it's something. They uploaded this entire 00:31:31.700 --> 00:31:33.819 collection to the Internet Archive, calling it 00:31:33.819 --> 00:31:36.779 the MySpace Dragon Horde. So if you were in a 00:31:36.779 --> 00:31:39.500 band in 2009, there is a tiny, tiny chance your 00:31:39.500 --> 00:31:42.140 song survived in the dragon horde. But for most, 00:31:42.339 --> 00:31:45.660 it is just silence. That is a very heavy lesson 00:31:45.660 --> 00:31:48.400 in digital permanence or the lack thereof. We 00:31:48.400 --> 00:31:50.259 assume that because something is on the Internet, 00:31:50.359 --> 00:31:52.640 it is forever. It is written in sand, not in 00:31:52.640 --> 00:31:54.900 stone. If the server bill isn't paid or someone 00:31:54.900 --> 00:31:56.920 makes a mistake, the history just disappears. 00:31:57.380 --> 00:32:01.019 So MySpace is effectively dead as a cultural 00:32:01.019 --> 00:32:05.460 force. The data is gone. The users are gone. 00:32:06.140 --> 00:32:09.480 But what about the man? What about Tom? This 00:32:09.480 --> 00:32:11.779 is my favorite part of the story. In Silicon 00:32:11.779 --> 00:32:14.680 Valley, the narrative is usually founder builds 00:32:14.680 --> 00:32:18.180 company, founder stays on as CEO forever, founder 00:32:18.180 --> 00:32:21.079 testifies before Congress, founder tries to build 00:32:21.079 --> 00:32:23.680 a rocket to Mars or buy an island or fight a 00:32:23.680 --> 00:32:26.240 cage match. Right. They can't let go. They need 00:32:26.240 --> 00:32:28.299 the power. They need the relevancy. They need 00:32:28.299 --> 00:32:30.720 to be the guy. Tom Anderson let go. Where is 00:32:30.720 --> 00:32:32.599 he now? What is he doing? He took his money. 00:32:32.619 --> 00:32:34.660 Remember, he cashed out in that original sale 00:32:34.660 --> 00:32:37.519 to News Corp. And he effectively retired in 2009. 00:32:37.859 --> 00:32:39.579 He didn't start another company. He didn't become 00:32:39.579 --> 00:32:41.579 a venture capitalist. And he is not sitting on 00:32:41.579 --> 00:32:43.960 a board of directors. He's not an angel investor 00:32:43.960 --> 00:32:47.289 screaming on Twitter. No. He is a landscape photographer. 00:32:47.549 --> 00:32:49.630 Landscape photographer. That is the most wholesome, 00:32:49.750 --> 00:32:52.289 unexpected twist imaginable. If you look him 00:32:52.289 --> 00:32:54.369 up on Instagram now, he travels the world. He's 00:32:54.369 --> 00:32:57.309 in Thailand, Myanmar, the Maldives, Burning Man. 00:32:57.569 --> 00:33:00.230 And he takes these incredibly beautiful, serene 00:33:00.230 --> 00:33:03.589 photos of nature. Waterfalls, mountains, deserts. 00:33:03.650 --> 00:33:07.650 That sounds genuinely lovely. Like a good life. 00:33:07.890 --> 00:33:09.769 There is a quote from him in the sources that 00:33:09.769 --> 00:33:12.700 I think sums it up perfectly. He said, I like 00:33:12.700 --> 00:33:14.920 the idea that anything can happen. Adventure 00:33:14.920 --> 00:33:17.099 in the unknown has always been appealing to me. 00:33:17.519 --> 00:33:20.319 He explicitly said he has no interest in returning 00:33:20.319 --> 00:33:23.220 to the tech grind. He saw what it did to people 00:33:23.220 --> 00:33:26.079 and wanted no part of it. He escaped. He won 00:33:26.079 --> 00:33:28.660 the game. He really did. He built the biggest 00:33:28.660 --> 00:33:31.200 thing in the world, sold it at the absolute peak, 00:33:31.380 --> 00:33:33.500 and walked away before the world turned on him. 00:33:33.640 --> 00:33:37.059 He preserved his sanity. He preserved his anonymity, 00:33:37.099 --> 00:33:39.519 for the most part. Meanwhile, the site itself. 00:33:39.839 --> 00:33:43.519 The site today is a digital ruin. As of late 00:33:43.519 --> 00:33:46.779 2024, it is still online but in read -only mode. 00:33:47.359 --> 00:33:50.079 Most images are broken links. The music player 00:33:50.079 --> 00:33:52.740 doesn't work. It is like walking through an abandoned 00:33:52.740 --> 00:33:54.880 mall where the mannequins have all fallen over 00:33:54.880 --> 00:33:57.099 and there is a thick layer of dust on everything. 00:33:57.359 --> 00:33:59.299 That's a spooky image. It really just stands 00:33:59.299 --> 00:34:01.640 as a monument to what was. So let's bring this 00:34:01.640 --> 00:34:03.079 all together. What does this deep dive really 00:34:03.079 --> 00:34:04.900 tell us? We started with the mission to see this 00:34:04.900 --> 00:34:07.059 as a business case study. I think the summary 00:34:07.059 --> 00:34:11.179 is this. Speed wins in the beginning. Cold fusion, 00:34:11.380 --> 00:34:13.619 the 10 -day sprint that allowed them to beat 00:34:13.619 --> 00:34:16.760 Friendster. Being fast is better than being perfect 00:34:16.760 --> 00:34:19.480 at the start, but sustainability wins in the 00:34:19.480 --> 00:34:22.940 end. Myspace won the sprint but lost the marathon 00:34:22.940 --> 00:34:25.579 because they sacrificed their user experience 00:34:25.579 --> 00:34:27.800 for short -term revenue with that Google deal. 00:34:28.250 --> 00:34:30.190 And they let technical debt accumulate until 00:34:30.190 --> 00:34:32.449 the site was buggy and unusable. They stopped 00:34:32.449 --> 00:34:34.150 caring about the person sitting in the chair. 00:34:34.329 --> 00:34:37.050 Exactly. Facebook won because they played the 00:34:37.050 --> 00:34:39.590 long game on utility, on trust, and on clean, 00:34:39.670 --> 00:34:42.150 fast design. They understood that the product 00:34:42.150 --> 00:34:44.469 is the network, not the ads you can cram onto 00:34:44.469 --> 00:34:46.650 the page. And for the listener, why should you 00:34:46.650 --> 00:34:48.650 care about a dead social network from 20 years 00:34:48.650 --> 00:34:51.780 ago? I think the lesson is about your data. We 00:34:51.780 --> 00:34:54.500 trust these platforms, Instagram, TikTok, Spotify, 00:34:54.780 --> 00:34:56.960 with our memories, our music, our entire lives. 00:34:57.400 --> 00:35:00.099 But if 12 years of music can vanish from a major 00:35:00.099 --> 00:35:03.079 platform like MySpace overnight, what guarantees 00:35:03.079 --> 00:35:05.780 do you really have for your cloud storage? For 00:35:05.780 --> 00:35:08.460 your photos? That is a chilling thought. Back 00:35:08.460 --> 00:35:10.860 up your photos, folks. Hard drives are cheap. 00:35:11.179 --> 00:35:13.460 Memories are priceless. Don't rely on the cloud 00:35:13.460 --> 00:35:16.079 to be there forever. Absolutely. Print your photos. 00:35:16.260 --> 00:35:19.510 Buy the vinyl record. Have a physical copy. I 00:35:19.510 --> 00:35:20.989 want to end with a final thought, something for 00:35:20.989 --> 00:35:24.429 you to chew on. We live in an era of tech billionaires 00:35:24.429 --> 00:35:27.389 who seem obsessed with power, with influence, 00:35:27.590 --> 00:35:30.110 and with shaping the future of humanity, often 00:35:30.110 --> 00:35:32.889 in very controversial ways. We have Elon buying 00:35:32.889 --> 00:35:35.550 Twitter to change public discourse. We have Zuck 00:35:35.550 --> 00:35:37.989 building the metaverse. The Titans trying to 00:35:37.989 --> 00:35:39.889 rule the world from their fortresses. And then 00:35:39.889 --> 00:35:42.519 we have Tom. Tom Anderson was the face of the 00:35:42.519 --> 00:35:45.199 biggest website on Earth. He was arguably the 00:35:45.199 --> 00:35:47.099 first influencer. He had hundreds of millions 00:35:47.099 --> 00:35:50.320 of friends. And yet he walked away to live a 00:35:50.320 --> 00:35:53.820 quiet, creative life, taking pictures of sunsets. 00:35:53.940 --> 00:35:56.920 He chose happiness over power. Exactly. So the 00:35:56.920 --> 00:35:59.420 question I'm left with is, in the grand chaotic 00:35:59.420 --> 00:36:02.000 history of the Internet, is Tom actually the 00:36:02.000 --> 00:36:04.000 smartest one of them all? I think he might be. 00:36:04.019 --> 00:36:07.099 I really do. That is it for this Deep Dive. Thanks 00:36:07.099 --> 00:36:08.300 for listening. See you next time.