At the Web 2.0 Summit a couple weeks ago, Owen Van Natta, CEO of MySpace, told the audience that “I really don’t view Facebook as a competitor.” It’s funny because absolutely every quote from the company in the press over the past couple weeks involves a differentiation from Facebook, and the more they discuss how they’re different, the more they appear to be a competitor. It’s an unfortunate truth for the company which missed its minimum traffic levels last quarter, costing the company $100 million.
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There’s been a bunch of coverage of the iLike acquisition deal over the past 24 hours including those that call this a massive blow Facebook. The primary “losers” in this supposed $20 million MySpace acquisition is iLike, who has been struggling to find a breakthrough business model. There’s also an underlying story about how the Partovi brothers and Mark Zuckerberg grew apart since the early launch of the platform.
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Today MySpace has annoucned that Owen Van Natta, the ex-Chief Operating Officer of Facebook has been appointed the role of MySpace Chief Executive Officer. It’s approximately a year and two months after leaving Facebook and one has to wonder, did Owen Van Natta have a non-compete? He clearly has substantial competitive intelligence and while he may not know the latest information from inside Facebook, he at the least has deep insight into the way the organization functions.

The announcement comes as no surprise given that MySpace has been leaking the information for the past few days, but now that it’s confirmed it will be interesting to see what comes of this. MySpace would most likely not hire Van Natta if they expected a costly legal battle with Facebook. At this point it appears to settle many old scores as Mike Arrington writes.
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That was quick. Five days after making the decision to block Facebook from legislative computers in the state of Maryland, the head of the assembly’s information technology office announced that he will reopen access to Facebook, likely by the end of the week.

Why the quick turnaround? The office ban of Facebook’s social networking site brought on protests from lawmakers, reports The Washington Post. The protesters expressed a strong enough need to utilize Facebook for work purposes, but it was a fear of spreading viruses that led Maryland’s General Assembly to block both Facebook and MySpace in the first place.
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In an article posted today by the Financial Times, Chris DeWolfe speaks about MySpace’s advertising strategy, “We’re not going to compete against Google and their 20,000 employees. But where we’ve made strides is against guys like MSN and Yahoo on the display and branded business.” It’s pretty obvious that their strategy is a portal strategy when you visit the site’s homepage. Every day there is another branded page wrapper slapped across the MySpace homepage.
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Compete.com just released their November statistics and Facebook has closed the gap with the U.S. social network leader, MySpace. According to Compete.com Facebook grew 10 percent to just under 50 million visitors in the United States versus MySpace who reached approximately 56.5 million visitors. At this rate Facebook will overtake MySpace for the largest social network in the United States within the next month or two.
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Facebook has moved one step closer to becoming the largest U.S. social network according to the latest data from Compete.com. Data from October shows that Facebook grew domestically by almost 4 million while MySpace continued their monthly decline, shedding over 1.58 million users, despite the launch of their highly buzzed MySpace Music product.

It’s clear that in the U.S. users are shifting from MySpace to Facebook and there are no signs that the trend is stopping anytime soon. Facebook also continues to experience massive growth abroad with more than 120 million active users. At Web 2.0 Summit today in San Francisco, Mark Zuckerberg suggested that around 50 percent of users return to the site daily.

I’m not sure if he misstated that metric but it’s clear that the site is highly addictive and enjoys a rapidly growing user base. While the latest data wasn’t that surprising, the company had a flat month previously suggesting that their domestic growth might begin to slow. For now there is no slowing and the site continues to surge.

We’ll continue to monitor both domestic and international growth as Facebook expands. At this rate, Facebook could potentially surpass MySpace by the end of the year.

A couple weeks ago I wrote about Facebook preparing to overtake MySpace domestically. Last week Hitwise published data that suggested that MySpace was more than 3 times the size of Facebook domestically. What?!? Nobody appeared to even question the statistics. Today Royal Pingdom used Google Trends to produce similar results to those produced by Compete which I published a couple weeks ago.

So which is it? Is Facebook being dominated by MySpace who is attracting 3 times the domestic traffic (according to Hitwise) or are they about to surpass MySpace? By using rational logic I’ve deduced that the latter is accurate: Facebook is about to surpass MySpace. The company has attracted the largest number of users in history to an individual social network and it continues an upward trend.

Personally, I have watched my friends which once stayed glued to MySpace make the shift to Facebook over the past few months and my expectation is that this will continue. While MySpace may have a music platform and may be generating 3 times the revenue, Facebook continues to grown and that’s really all that matters for the time being.

The company wants to have the most accurate mapping of the social graph and they won’t stop until they get there. It is becoming a central distribution platform for sharing content among all our contacts. My other guess is that the future of Facebook is much brighter than comScore and Hitwise. Both companies have continuously produced inaccurate data which has in some cases impacted the public markets.

Google for instance took a nose dive after comScore suggested the site’s traffic had slowed which would make it more challenging to meet earnings expectations. The stock eventually rallied after it ended up beating estimates, contrary to comScore’s misleading data. For being such large companies, it’s time that some of these analytics companies start producing accurate data.

Do you think Facebook will surpass MySpace domestically in a short period of time? Who’s data is accurate, Compete.com & Google or Hitwise & comScore?

On the heels of the MySpace Music launch, MySpace has launched a self-service advertising site which appears to be targeted specifically toward musicians. You can access the service by visiting advertise.myspace.com. The site functions similarly to Facebook’s advertising solution except that advertisers can create custom banners that are either 728×90 or 300×250.

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