MySpace originated as a side project at Los Angeles-based eUniverse, an internet marketing company founded in 1998 by Brad Greenspan, and which later changed its name to Intermix Media. The story goes that employees of eUniverse joined the Friendster network, saw its potential, and set out to do it better. The project involved Chris DeWolfe (later MySpace CEO), Josh Berman, Toan Nguyen, and Tom Anderson; they reportedly finished the first version in about ten days.

MySpace was officially launched in January 2004, and within a month reported its first million registered users. The company claimed 5 million members by November of that year. By the time Rupert Murdoch's News Corporation bought Intermix in July 2005, MySpace was reporting a membership of 20 million. The corporation's MySpace division is now headquartered in Beverly Hills.

Ups and Downs

The history of MySpace is marked by early internal power struggles, financial ups and downs, and a couple of headline-grabbing lawsuits. The founder of Intermix resigned from the company in 2003 under a cloud of accounting problems, but retained a significant ownership position in the publicly traded company and later fought the News Corp deal. Co-founders Chris DeWolfe and Tom Anderson, often credited with the rapid early growth of the MySpace network and much of its dynamic evolution, were apparently asked to step down from their executive positions in 2009, though they both remain on the company's board.

One of social network's most popular features, the on-demand MySpace Music streaming service, was born from a lawsuit. In 2006 Universal Music Group sued for damages from copyright infringement. The record label accused MySpace of complicity in its users' illegal uploading of thousands of music videos. The two settled the dispute by forming a joint venture: MySpace Music. That same year, the family of a fourteen-year-old girl who was allegedly raped by a nineteen-year-old man she met on the network, sued for $30 million. The company subsequently instituted new security features aimed at protecting minors. That lawsuit was dismissed in 2007 when a judge ruled that interactive computer services like MySpace are protected by the Communications Decency Act of 1996.

Innovation and Acquisition

MySpace rode an early wave of interest among young, tech-savvy digital natives, who jumped onto the network and filled it with splashy, custom home pages and a fire hose of shared media. And the company hasn't been shy about acquiring the technology it needs to support the social networking habits of those users. The network acquired photo-video hub Photo-Bucket in 2007, social music discovery service iLike in 2009, and the online music service imeem in 2009.

In 2008 the company launched SlingShot Labs, an “incubator” where it planned to develop new web ventures and nurture new features and technologies for MySpace. In 2010, amid rumors of a SlingShot shutdown, an events feature it developed called SocialPlan was used to upgrade the MySpace Events page.

How MySpace Makes Money

MySpace generates most of its revenues from advertising — a lot of advertising. But the network has also explored brand integration into short videos from the likes of Discover, TMZ, and Atomic Wedgie, as well as offering premium content, and it's is even producing original short-form series.

In 2010, in a controversial move, MySpace began offering its users' real-time data, including things like blog posts, locations, photos, reviews, and status updates, to third parties for packaging and resale. Austin, Texas-based InfoChimps was the first to package 24-hour hunks of MySpace's data stream. But MySpace isn't selling the data. “MySpace provides developers … with free access to publicly available real-time data …” MySpace said in a statement. Infochimp added, “By giving developers free access to publically available real-time data … MySpace reinforces its commitment to powering the real-time social web and the development of open standards.”