I was struck by this article on CNN today, it talks about a cofounder of Paypals new startup Slide.com The first thing I asked myself is why does a slideshow widget for myspace.com need $20 million in funding.
Turns out there is a lot more to this then just a slideshow. The company wants to create a recommendation system that will allow anything from dating to price comparison shopping. Comscore says slide gets about 4 million uniques a month, from myspace.com
If I was myspace i’d be pretty worried, you have an entire generation of VC companies being funded growing off the back of myspace. Once these companies get big they will either get bought out like youtube or begin competing in some way. There is no VC that is going to sit by and say, well we have maxed out our myspace traffic lets just sit back and collect profits.
Now if I ran slide.com I say, great we have millions of users coming from myspace but if myspace dies so do we. I would then say hey, we are going to create a mini myspace on our site. We will allow bands to upload up to 5,000 images and audio on our network and only 20 images on our msypace widget. We will allow people to comment on the photo’s and form social networks around bands. This site would have nothing but photo albums about bands and a search facility to allow you to search for your favorite bands. Of course you could also listen to bands music as you browse their albums. This kind of site would explode and really hurt myspace.
Myspace today is like Match.com of a few years ago. Match.com used to be the king of online dating. Now niche sites of every kind are popping up and match.com doesn’t even really compete with sites for jewish singles, black dating etc and the attacks across all niches are increasing every year. Myspace.com is feeding many sites traffic via widgets that cater to niche audiences and those sites will end up becoming mega sites that will compete with myspace.