MySpace down, but not out

According to numbers recently released by Compete.com, MySpace has lost around 20% of it's total user base since June. That's pretty staggering, but is anyone really that surprised?

Rather than write a really long meandering post (which I already did, but you'll never read it) I'll just get to the meat of my thoughts:

1) No, MySpace is not going to die.
If somehow half of the population of China were to vanish overnight, it would still be one of the most well populated countries in the world. Twenty percent is not a death-knell for MySpace and it's 50 million remaining users, its a wake up call.

2) MySpace does not have a loyalty problem, it has a PR problem. 
If I were a MySpace honcho (or someone consulting for it like an old buddy of mine), I would be more concerned with the sluggish rate of new account creations than with the rate at which its users are leaving. The old perception that MySpace is for teens is a huge disadvantage, as adults are avoiding it in favor of Facebook and teens are signing up at other sites due to lack of activity or interest from their friends. MySpace is too geared toward the content found on it, not the content the user can publish or publicize by using it. When it shifts gears, the bleeding will taper off and new blood will begin to generate.

3) The social web is still evolving. 
Oh, but the web cognoscenti love to make far-reaching predictions, and for some reason people believe them. Social networking (the term feels so dated, somehow) is still the wild west of the internet. The rules are going to change in ways I won't even pretend that I can predict, but judicious management of resources will leave MySpace (and Facebook and Twitter) primed to capitalize on those changes.

4) About that judicious management...
Uh, yeah, guys? It's time to stop sitting on your hands. If MySpace execs aren't thinking damage control, then they aren't thinking survival. Here are two things they can do:
- A robust API focused on building flash games. Facebook is doing it, and there's no shame in ripping off the formula.
- OpenID integration. MySpace needs new accounts, and eliminating barriers of entry can be a big help.
These two things can help generate a steady stream of new users.

I've read lots of speculation that MySpace is on its way out, and by extension all of social media. It's not. Neither was TV some 70 years ago, but that didn't stop people from proclaiming it a fad.