Twitter jumped the shark, now it looks like MySpace

By Tim Culpan

Elon Musk has good reason to laugh at those naysayers who predicted Twitter would crash as soon as he laid off half its workforce. Without engineers to keep it going, opined the critics, the platform would collapse. Two months later, the social media site is still alive and may have even grown – Musk has claimed user numbers increased but shown no verifiable proof.

Its demise, however, is still possible. Not because there’s a lack of talent to catch software bugs or keep the servers running, but because its time may have come. Recent gimmicks include reinstating banned accounts, introducing blue ticks for all (as long as you pay) and pseudo-democratic policy decisions. At first glance, none of these alone herald impending doom, merely the whims of a billionaire showing off his new play toy.

Fonzie (Henry Winkler) in the famous shark-jumping scene from Happy Days.
Fonzie (Henry Winkler) in the famous shark-jumping scene from Happy Days.

But history may show this as the moment Musk jumped the shark. That term comes from the 1970s American sitcom Happy Days, which starred Henry Winkler as the leather-jacketed Fonzie and Ron Howard as freckle-faced Richie Cunningham. At the time, the series was one of the top-ranked shows on US television. By season five, though, its writers were getting desperate for new ideas, so they had The Fonz do a water-ski jump over a shark. That episode, although a ratings success, showed how farcical the producers had become in chasing attention.

The show went on for another six seasons, but the audience started to lose interest and its ratings slid dramatically. Jumping the shark didn’t kill Happy Days, but it signalled a peak in relevance and popularity.

Thirty years later, similar desperation could be seen on the faces, and chequebooks, of executives at News Corp. Eager to get into the hip new arena of internet social media, Rupert Murdoch’s multinational conglomerate in July 2005 spent $US580 million ($837 million) to take over MySpace.

At the time, MySpace had 16 million users, making it the US’s fifth most-visited website and the world’s premier social networking platform. Murdoch saw it as a chance to drive users to his other properties, including websites for the Fox brand of news, sports and film. (Disclosure: two years later, News Corp bought Dow Jones and The Wall Street Journal, which compete with Bloomberg in the market for financial news and information).

Beyond millions of users, the purchase gave Murdoch’s team what they desperately craved: chic. Instead of buying physical newspapers or tuning into cable news shows, youngsters of that era were spending more time at a computer writing their own content and sharing updates with friends. His humble roots in Adelaide, coupled with decades in London’s cut-throat newspaper market, had made Murdoch rich and powerful, but it didn’t make him cool. For that, he turned to the Los Angeles-based web wizards.

Although MySpace continued to grow, hitting 100 million global users a year later, it was losing its novelty value to a hip new start-up out of a Harvard University dorm room. In 2008, Facebook overtook MySpace in web traffic.

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Musk could learn a lot from Murdoch’s mistakes, though he probably won’t.

Eager to monetise MySpace, and hit a publicised target of $US1 billion in ad revenue by 2008, News Corp started force-feeding ads to the site’s users. Tensions escalated between the website’s founders and the team Murdoch brought in to run it.

Rupert Murdoch’s purchase of MySpace gave his team what they desperately craved: chic.
Rupert Murdoch’s purchase of MySpace gave his team what they desperately craved: chic.Credit:Rob Homer

Innovations aimed at making it more usable, such as cutting the number of pages to be loaded, were nixed by the new owner’s desire to squeeze every penny out of the deal. Before long, it was apparent that those who knew MySpace inside out were being usurped by the outsiders who bought it and wanted to assert their right to operate it as they pleased.

Users spent less and less time on MySpace and more on Facebook. Years later, Murdoch recognised that as the beginning of the end.

Musk’s predicament is not dissimilar.

Having shelled out $US47 billion, not all of it his own money, the chief executive of Tesla and SpaceX funded the deal with $US13 billion of debt that requires around $US1.5 billion in annual interest payments. By comparison, Twitter posted $US5 billion in revenue in 2021, with a net loss of $US221 million and negative free cash flow of $379 million. The world’s second-richest man has little choice but to hurriedly monetise his new asset unless he’s to pay that debt out of his own pocket.

Musk could learn a lot from Murdoch’s mistakes, though he probably won’t.

Yet, Twitter’s challenges, and demise, may have started before Musk even made his half-hearted bid back in April. The site trails at a great distance behind rivals Facebook, Instagram, YouTube, WhatsApp and TikTok, with just 3.5 per cent of global users naming it as their favourite social media platform, according to market researcher GWI.

What’s more, more than 75 per cent of Twitter’s audience are regulars on the platforms of major rivals, but the same cannot be said in reverse – just 54 per cent of Instagram and 56 per cent of TikTok users are also active on Twitter. If push comes to shove, those on the blue-bird app have many other places to land. Additionally, it trails in time spent at an average of just 5.5 hours a month globally, behind YouTube at 23.4 hours and TikTok’s 22.9 hours, according to data compiled by HootSuite and We Are Social.

But perhaps the biggest worry is the one Murdoch himself flagged.

While Musk’s attention-grabbing takeover has doubtless attracted some new fans and more engagement, that may only be fleeting. In fact, average time spent on Twitter declined 15 per cent in the third quarter of 2021 and 6 per cent in the final three months of that year, not long before his takeover drew bigger crowds, according to data compiled by Bloomberg Intelligence.

If that downward trend returns, as marketers and researchers predict, then Twitter has already peaked. There may be times when stunts and one-off events draw people back. But it’s only so often that a teenage activist can school a balding muscle-head, or the site’s own proprietor can run a gimmicky opinion poll.

The rest of the time, Twitter has a good chance of sliding slowly into irrelevance – like a dude wearing a leather jacket jumping a shark.

Bloomberg

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Source: Thanks smh.com