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How It Really Happened: The Hypocrisy of MySpace's $234 Million Judgment

Sanford_wallace_spam_kingMediapost writer Wendy Davis reports on MySpace's legal victory against Sanford “Spamford” Wallace and Walter Rines, who targeted members of the social networking site by stealing passwords through "phishing" scams, then emailing other MySpace members to induce them to visit other websites.

The irony is that MySpace itself was built, thanks to marketing methods that we know today as spam. Trent Lapinski over at Valleywag.com writes that "Myspace is Spam 2.0", and goes on to describe the company's real history:

  • CEO Chris DeWolfe, who from October 1999 through March 2001 acted as the VP of Sales and Marketing at Xdrive Technologies, Inc., a company that offered millions of users large amounts of free online storage during the dot-com bubble. He learned all about the business of "free," and more importantly, "...that people will sign up for almost anything that they find useful, and they could care less about the fine print."
  • Tom Anderson, the eventual face of MySpace, was originally hired as a copyeditor in DeWolfe's marketing department at Xdrive. He later became the friendly face for the PR campaign.
  • DeWolfe's new company, ResponseBase, was purchased by eUniverse on September 9, 2002. This date was the actual moment of birth for MySpace. In August of 2003, eUniverse CEO Brad Greenspan received and accepted an invitation to join Friendster from Chris DeWolfe, who had been a member since June 2003. Recognizing Friendster's potential, a plan was hatched to quickly mimic the appealing features of the site, re-brand it as MySpace, and then out-market them using eUniverse's resources.
  • According to internal emails and documents, MySpace 1.0 was ready within ten days. As part of the internal testing and promotion of the site, the company held a contest to see who could sign up the most people. The hope was that if all 250 eUniverse employees brought on 10 friends, they would have a starting user base of 2,500. Even self-proclaimed loner Tom Anderson took part, stating in an email, "I am as anti-social as they come, and I've already got 20 people to sign up."
  • After the 250 employees spammed their friends, and those friends spammed their friends and their friends' friends, MySpace went on to become the marketing juggernaut it is today.
  • DeWolfe's original business model was to sell accounts to MySpace, but it was Greenspan who proposed to keep MySpace free and to make profit through advertising. Greenspan believed in the concept so much, he even cannibalized his other assets, such as dating site CupidJunction, which at that time was a top dating website with over 3 million users.

As tawdry as this may seem to some people today, it will be interesting to see how historians judge this medium. After all, when you compare the early history of MySpace to daily newspapers (which, according to some accounts, were created "...to spread defamatory reflections"), Brad Greenspan's intentions seem downright benevolent. 

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