Launching MySpace and Its History

 In Golden Age

As the founder of MySpace.com, now the fifth most popular website in the English language and one of the top brands in the world I’ve seen a lot written and said about its creation. Some of it is exaggerated and a lot of it is just plain wrong. Simply put, Myspace was 100% created and marketed by eUniverse (of which I ran and was CEO) in 2003. With MySpace myths growing almost as fast as the website itself, I decided to sit down and write the real story of how MySpace was born.

eUniverse – The incubator that would launch MySpace

My intuition told me that online communities were the future of the internet and I started my first internet company in 1998. I called it eUniverse.

Startup capital for eUniverse came from money I made from my first business Palisades Capital, which I ran out of my dorm room at UCLA and introduced hedge funds to public companies looking for investors. Within two years of starting Palisades Capital I had helped find public companies over $40 million in financing.

Soon after launching eUniverse I traveled the country looking for outside investors. It didn’t take long before Lehman Brothers and other investors who shared my vision provided $7 million in additional capital to fully fund the business, and I took eUniverse public in 1999.

eUniverse would quickly become a diversified business encompassing a number of community-focuses websites. My first two acquisitions were a company in Connecticut that sold music CDs called CDUniverse, and CasesLadder, a gaming community. After seeing first hand the success of CasesLadder and the power of community my strategy expanded, and I began to create and acquire more online communities while continuously launching new ideas. I managed a growing group of talented employees and together we grew our websites and users at a frenetic pace. Remaining true to our early focus of creating communities that shared online entertainment we then launched a dating site called CupidJunction.

Starting with just a couple hundred thousand users per month we grew the eUniverse family of brands at such an incredible rate that by the end of 2001 we had built an online audience that Nielson Netratings consistently ranked in the Top 15 most visited web properties in the United States, and numbered about 20 million unique users per month

The economic downturn of 2001 wiped out many internet companies, but eUniverse not only survived, we continued to turn a profit and kept on building and launching new ideas. By the end of 2003 our audience was even larger and we had developed a portfolio of major web brands including Skilljam (a gaming site), Flowgo.com (entertainment), CupidJunction (dating), and of course MySpace (social networking). This family of community websites would ultimately become worth tens of billions of dollars.

MySpace – Social networking at warp speed

Over the years, we had developed strong technology along with a 250-person team of talented and dedicated employees. Always on the lookout for new opportunities, my team noticed the success of the social networking site Friendster and decided we could do a better job. Because I mixed the staff across multiple divisions within eUniverse, we were in a position to rapidly deploy a team that could jump into this arena and instantly be a contender.

We followed Friendster’s launch and growth for several months when I decided that eUniverse would be in the social networking business. In the summer of 2003, as the CEO of eUniverse (and largest shareholder), I made the decision to use our technology, resources, and capital to launch Myspace.com, which debuted to the public on August 15, 2003.

The very first MySpace users were our employees and we held contests to see who could bring in more friends. As this was happening, we began introducing MySpace to the rest of the world by promoting it to the tens of millions of people who were already part of the eUniverse family of communities.

I took the best talent from eUniverse and infused them into the Myspace team to give us the best shot. One key architect was tech expert Toan Nguyen who helped stabalize the Myspace platform when I asked him to join the team.

Many smart minds contributed to adding features and ideas to improve the functionality of MySpace. It was a true team effort that I had the fortune to lead during the formation and launch of MySpace.

Allowing people to play games and socialize was another key feature we infused into the MySpace experience. Using games from other eUniverse web properties, we created a Game-tab at the top of all Myspace pages which allowed users to play casual games like ‘Gold Miner’ which was one of the most popular activities as MySpace started growing.

Shortly after launching MySpace, team member Chris Dewolfe suggested that we start charging a fee for the basic MySpace service. Luckily I was the boss and I nixed the idea, understanding that keeping MySpace free and open to everyone was the only way to make it a large and successful community.

The growth was incredible and MySpace just kept growing, mostly by word of mouth. It really was hard to believe; from the humble roots of a community website started by eUniverse employees and their friends, we built the biggest phenomenon on the internet.

The momentum we infused at the launch of Myspace surged and by early 2004, a mere six or so months after launching MySpace, the social networking phenom had overtaken Friendster.

What were the keys to the success of MySpace?

1) Having 20 million users and e-mail subscribers as part of the eUniverse community we were able to quickly breathe life into MySpace, and move it to the head of the pack of social networking websites at lightning speed. Harnessing the traffic to create critical mass is everything!

2) The Superior eUniverse technology and tech team allowed Myspace to stay fast and fun for users while competitors like Friendster and other traditional start-ups couldn’t get over their early technical hurdles. Plus the Myspace guys could focus on marketing/promotion while our
existing tech infrastructure seamlessly supported growth.

3) eUniverse provided MySpace with a complete infrastructure of finance, human resources, technical expertise, bandwidth, and server capacity right out of the gate so the MySpace team wasn’t distracted with typical start-up issues. Everyone was simply focused on growing the business.

Over 4 months after eUniverse had started Myspace, on December 17, 2003 eUniverse sold 33% of Myspace to a group of individuals that included Chris DeWolfe and Josh Berman. The agreement clearly defines that: “Myspace was created and run as eUniverse’s social network business.

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