MySpace, Apps Leak User Data

The Wall Street Journal

MySpace and some popular applications have been transmitting information to outside advertising companies that could be used to identify users. Above, website pages from MySpace.com.

MySpace and some popular applications on the social-networking site have been transmitting data to outside advertising companies that could be used to identify users, a Wall Street Journal investigation has found.

The information was primarily sent by MySpace when users clicked on ads. The website had pledged to discontinue the practice of sending personal data when users click on ads after the Journal reported it in May.

A MySpace spokesman said the data identify the user profile being viewed but not necessarily the person who clicked on the ad. MySpace is owned by News Corp., which also owns The Wall Street Journal.

MySpace, which had 58 million visitors in the U.S. in September, has been struggling to turn its business around in the face of tough competition from Facebook Inc., which had 148 million U.S. visitors last month, according to comScore Inc.

The data being transmitted were MySpace user IDs. These unique numbers can be used to look up a person's MySpace profile page, which sometimes includes their real name, photographs, location, gender and age. The advertising companies being sent the data, which included Google Inc., Quantcast Corp. and Rubicon Project, said they didn't use the information.

Earlier this week, the Journal reported that the top 10 most-popular applications on Facebook were passing that site's user ID numbers to outside companies. Facebook said it is changing its technology to block the transmission of user IDs.

The MySpace leaks appear to be more limited than those at Facebook, which has far more users and requires them to make public their name, gender and country.

On Facebook, the user ID is linked to a person's real name. MySpace allows users to hide their real names and use a "display name" on the network. That means that user IDs don't necessarily link to people's real identities. MySpace says knowledge of a user ID number only provides access to information a person has made public on their profile.

In addition, the Journal investigation found some MySpace applications were transmitting user IDs, including BitRhymes Inc.'s TagMe, which lets its 8.3 million users make and comment on friends; WonderHill Inc.'s GreenSpot, a virtual gardening game with 1.8 million users; and RockYou Inc.'s RockYou Pets, a game with 6.1 million users.

MySpace said it prohibits app makers from sharing user data, including user IDs, with other entities. "It has recently come to our attention that several third-party app developers may have violated these terms and we are taking appropriate action against those developers," a MySpace spokesman said.

The Journal's investigation demonstrates how fundamental Web technologies can jeopardize user privacy. When a user clicks on an online ad, several pieces of data are transmitted, including the web address of the page where the user saw the ad. At both MySpace and Facebook, that web address has included a user ID.

Craig Wills, a professor at Worcester Polytechnic Institute who has studied how social-networking sites handle user IDs, said such referral data are a growing problem for the Web. As more sites try to tap into social-networking capabilities, "there is the potential danger that those sites with the identifier don't necessarily take care of it, and potentially leak it to whatever third parties are present," he said.

In many cases, the transmission is inadvertent. A RockYou spokeswoman said a company that works with RockYou was transmitting user information to a third company without RockYou's knowledge. "We have taken immediate action to indefinitely suspend their services in connection with RockYou and we are reviewing all third-party providers to ensure compliance with our platform partners' terms of service," she said.

WonderHill didn't respond to requests for comment.

The Journal found that TagMe transmitted a user ID to online tracking company RapLeaf Inc. MySpace and TagMe both said TagMe has since stopped the practice. RapLeaf declined to comment.

BitRhymes, maker of TagMe, said it "has a strict policy of not passing personally identifiable information to any third parties. When we were informed of the issue, any suspect relationship was immediately dissolved."

Once-Fading MySpace Focuses on Youthful Reincarnation
USA Today

MySpace Revamps, still not driving website traffic for other sites

BEVERLY HILLS — Facebook thumped it, and Twitter threatens it as a source for entertainment news and real-time searches.

But MySpace, nestled in the entertainment capital of the world, thinks it can survive — even thrive — as a repository for all things music, Avatar and Twilight for the under-35 crowd.

"It would be silly to count us out," says Jason Hirschhorn, who, with Mike Jones, runs the company as co-president. They replaced Owen Van Natta, who was jettisoned as CEO last month after less than 10 months on the job.

"There is a pulse of pop culture on MySpace," says Hirschhorn, a former MTV executive. "It is the place where 100 million people congregate, and hundreds of thousands sign up every day,"

They have their work cut out. MySpace, a unit of News Corp. Digital, has stumbled through two CEO resignations in the past year, while Facebook and Twitter surged. (Van Natta's predecessor, Chris DeWolfe, left in April 2009.) Nonetheless, MySpace remains one of the Internet's most enduring brands. It is profitable, and it is expected to haul in more than $350 million in revenue this year — mostly from ads.

Hirschhorn acknowledges that every major brand goes through plateaus, but says the strong ones overcome them. He and Jones concede that MySpace's online traffic had flattened last spring, user engagement was down, and its products lacked focus and vision. But with an ambitious rebranding now underway, they foresee a renewal in its fortunes. The company is hiring engineers designers and marketers in Los Angeles, San Francisco and Seattle.

MySpace is moving back to its original DNA: appealing to self-expressive, creative under-35-year-olds who are into games, music and movies. More than half of MySpace's estimated 100 million users are 25 and younger, according to market researcher ComScore. The 13-to-34-year-old demographic spends 84% of all user time on the service.

MySpace intends to appeal to that demographic with a mantra of "Discover and be discovered," a fancy way of saying it wants to be the online venue to find new friends, movie trailers, little-known bands and social games.

The rebranding is illustrated in design mockups splashed across the walls of a user-experience lab here: simple, clean pages with vibrant looks designed to draw artists, hard-core social-media users, brand managers and others. There is even talk of a new company logo.

In its pursuit of customers, MySpace has reinvented itself in several ways:

•New user home pages, released last month, are heavy on live personal content, but without the clutter once associated with the original MySpace design. "The product got too big and congested," Jones says, looking at a simplified new interface mockup. "It became unfocused."

•Forthcoming profiles for celebrities such as Lady Gaga and Angelina Jolie are easier to navigate and offer encyclopedic data on their subjects.

•Social-gaming firm Playdom is helping MySpace reinvigorate its gaming channel. This month, it launches Wild Ones, a shoot-'em-up already available on Facebook, on MySpace. More games, including ones exclusive to MySpace, are on the way. "Thirty percent of our users play games; we think it should be at least 50%," says Jones, a former AOL executive.

•Through its constant tweets on Twitter, MySpace has developed into a heavy-duty entertainment news service for music, celebrities and youth-oriented movies such as New Moon and Alice in Wonderland. Twitter and MySpace have also synced services, so tweets or status updates on one service are automatically duplicated on the other.

MySpace is not only reinventing itself, but recasting the competitive climate. "When we think about Twitter and Facebook, we don't think about competition as much as we think about partnership, distribution and synchronization," Hirschhorn says.

Yet can MySpace — once the undisputed king of social networking — remain relevant as a scaled-down Web portal for music and entertainment news? Industry analysts, including Debra Aho Williamson, aren't so sure. They say MySpace faces an obstacle course of competitors, starting with the omnipresent Facebook and now including Google Buzz.

"For months we've heard about the company's plan to refocus on its historic roots in music and entertainment," says Williamson, of market researcher eMarketer. "But the turnaround has been painfully slow, and this shakeup will only reinforce the perception that MySpace can't be fixed."

Though millions of people use MySpace Music, the company "clearly needs to find its next big" thing, says Richard Greenfield, an analyst at investment brokerage BTIG. "This is no easy task and may require a meaningful acquisition, maybe of a social-gaming company like Zynga or a start-up."

Since Facebook's audience overtook MySpace last May — 70.3 million unique users vs. 70.2 million — it has widened its lead dramatically. Today, Facebook boasts 400 million members, about four times as many as MySpace.

As audiences melt from MySpace, so are marketers, says researcher eMarketer. Facebook will surpass MySpace in advertising revenue this year for the first time — a year earlier than expected, it says.

EMarketer estimates ad spending on MySpace will fall 21% this year, to $385 million, worldwide. It expects Facebook to rake in $605 million in ads worldwide this year, up 39% from 2009. If not for a three-year, $900 million search deal with Google that is set to expire by midyear, MySpace's revenue would be lower, Williamson says.

MySpace's Jones says his company is still in discussions with Google to possibly extend the deal, or it could partner with others in the future.

"MySpace has been good at monetization, and others notice that," he says.

Privately held Facebook, by comparison, could vacuum up $700 million to $1.1 billion in revenue this year, based on estimates from analysts including Forrester Research's Augie Ray. However, Trip Chowdhry, of Global Equities Research, says $350 million to $500 million is more accurate.

"MySpace rested on their laurels, got complacent and failed to innovate," says Jeremiah Owyang, a partner at market researcher Altimeter Group.

Return to its roots

Facebook's dominance notwithstanding, MySpace and others can thrive in fragmented spaces, such as music and entertainment news, says Eric Mandl, head of large-cap tech banking at UBS.

MySpace remains a force in music. More than 13 million bands, from Pearl Jam to garage bands, find it a vibrant tool to communicate with fans.

"Their brand was born in the music community, as a hub for attracting bands and fans," says Tim Westergren, founder of Pandora, an online music service."There still is a tremendous loyalty toward MySpace, and it is a monster audience. They were the first mass destination and home for DIY artists. Bands remember that."

And, yes, MySpace's appeal lingers for celebrities and creative types.

Cindy Margolis, a former Playboy Playmate with 16,000 people on her MySpace fan page, still finds it a useful marketing tool. It is part of her PR strategy to promote her Fox Reality Channel show, Seducing Cindy. She also uses Facebook and a personal website.

"To keep my loyal cyberbuddies, I need MySpace," she says. "It is a huge vehicle to gain, and maintain, thousands of followers. Facebook is more intimate. They are two different spaces."

"It's great to get feedback on the shows that I do, which can be complicated," says Bobby Roth, who has directed episodes of Prison Break, Lost and FlashForward. He has 10,000 friends on MySpace.

MySpace's enduring appeal to millions, with the backing of Fox, has not been lost on software developers like Jon Siegal, CEO of Fan Appz, a Facebook application that helps celebrities and athletes market themselves to fans. Siegal and others are interested in working with MySpace.

"The game isn't over for (MySpace)," Owyang says. "They still have a strong foothold, the opportunity to try new tactics, if their management team — and internal culture — can quickly come into alignment."

Says Hirschhorn, "We will always be culturally relevant. And we'll be here in five, 10 years."

Microsoft to pull Facebook, MySpace into Outlook

Office Productivity Meet Outlook "Time Suck"

SEATTLE (AP) - Microsoft Corp. is taking another step toward turning Outlook, its desktop e-mail program, into a hub for information from popular social networking sites such as Facebook and MySpace.

On Wednesday, Microsoft is releasing a "beta" test version of the Outlook Social Connector. The add-on software, which was first discussed last November, adds a new pane to the main e-mail reading screen on Outlook. When a user clicks to read an e-mail message, the new pane fills up with the sender's most recent social-networking activities. Those could include the addition of a professional contact on LinkedIn or a "what I'm doing now" status update from Facebook.

Microsoft has a mixed record when it comes to Web trends. The company's free Hotmail and Windows Live Messenger programs are widely used, but its Windows Live blog/social network didn't pick up much steam in the face of competition from Facebook. In this case, a small startup called Xobni has already built an Outlook add-on that combines inbox search with content from Facebook, LinkedIn and others.

Microsoft's new software also treats Outlook itself as a social network. If the e-mail sender and recipient are jointly working on a document stored on a company's Sharepoint server, both will see updates if one logs on to make edits.

For now, the new software doesn't let people use Outlook to push information back up to LinkedIn, Facebook or other sites.

People using Office 2003, 2007 and beta versions of Office 2010 can download the updated Outlook Social Connector beta Wednesday. LinkedIn, which is primarily used for business networking online, is the first company to make its add-in software available. It can be downloaded from LinkedIn.com.

Microsoft said the Facebook and MySpace plug-ins will be ready for download by the time Office 2010 goes on sale in June.

Will Kennedy, a corporate vice president for the Office group, said some of Microsoft's business customers have expressed concern that employees will become less productive if they have all this extra information at their fingertips.

But Kennedy sees business-friendly uses for the Social Connector. He thinks it could speed up processes that require a string of people to sign off, because each person in that chain could see when it's time for him or her to weigh in.

"We don't want this to sort of be the next great time waster in the workplace," he said.

Yahoo Endorses Social Networks

Yahoo Inc. is joining an effort backed by Google Inc. and News Corp.'s MySpace to spur the creation of applications for social networks, a small but growing area of interest among software developers.

Yahoo said Tuesday it will endorse a technical specification called OpenSocial that was initiated by Google and supported by MySpace and other social- networking sites, a sign the initiative is gaining momentum after a slow start last fall. Yahoo, Google and MySpace also said they are planning an independent, nonprofit foundation to provide technology and intellectual-property guidelines for the evolving standard, while ensuring no one company has too much influence over its future.

Yahoo's move could pressure holdouts like Facebook Inc., which has stuck to its own software standards for developers, to join OpenSocial. Facebook, whose investors include Microsoft Corp., has indicated a willingness to license its platform to other sites. A Facebook representative said the company is evaluating OpenSocial. Microsoft, which has made a bid for Yahoo, hasn't joined OpenSocial, either. It declined to comment on if it would do so or to comment on Yahoo's move.

MySpace and Google's social network, Orkut, have both recently launched developer platforms compatible with OpenSocial. But Facebook, whose platform was announced in May 2007, has a head start and already offers some 20,000 applications to its users. MySpace owner News Corp. also owns Dow Jones & Co., publisher of The Wall Street Journal.

Internet companies are initiating the new guidelines to encourage software developers to build a range of entertainment and productivity services to keep users hooked on their sites. Developers, keen to reach the massive audiences, have done so eagerly, building tools like photo-sharing software or games that users can add to their profiles and share with their friends.

OpenSocial was designed to make it easier for developers to create these services across a range of Web sites. Developers can build their applications once and have them run across any site compatible with OpenSocial, with minimal modifications. But in the months after its launch, many developers were disappointed with the technology, which they said had holes and was not widely supported.

On a conference call with reporters, Joe Kraus, director of product management at Google, said developers will potentially be able to reach more than 200 million users through an OpenSocial-based application by next week. He added that the nonprofit will help to drive the effort by formalizing a range of guidelines critical to its success. For instance, the foundation will enable developers and sites to use the OpenSocial specification without fear of patent- infringement suits from contributors.

Wade Chambers, vice president of platforms for Yahoo, said on the call that Yahoo was not yet going to provide details about which Yahoo sites for which developers could build OpenSocial-compatible applications, but he said Yahoo wanted to sign on because it felt the standard was "rapidly maturing."

By Jessica E. Vascellaro
The Wall Street Journal; March 26, 2008