MySpace, Facebook: A Tale of Two Cultures

(page 2 of 2)

Facebook begins with relationships, rather than content, helping users keep in touch with friends from college or professional colleagues. "A lot of young users find that MySpace and Facebook can serve distinct functions in their lives," says Siva Vaidhyanathan, a cultural studies professor at New York University. "Facebook and MySpace are achieving something close to an identity and a niche that can allow both of them to thrive."

For businesses, then, both networks continue to merit investment for different reasons. For consumer-products companies targeting younger audiences or entertainment companies, MySpace seems like the obvious best bet. According to MySpace, entertainment giants Sony (SNE), 20th Century Fox, and Warner Bros. (TWX) are among its top advertisers. "When it comes to discovering bands, promoting music, MySpace is still the place," says Vaidhyanathan.

Attractive Minimalism

But Facebook's minimalist approach to features can also be attractive to companies. While MySpace has its own media players and formats to which companies simply upload content, Facebook allows users and companies to build multimedia applications. Travel companies, such as SideStep.com, have built interactive maps allowing users to share vacation ideas. The Washington Post's (WPO) Compass application allows users to share political beliefs. "Facebook is very Web 2.0," says Hirschhorn. "It is the 'unbrand' and it allows users to pick the best features and companies to showcase their own brands."

Advertisers continue to pour their dollars into MySpace, where a more traditional banner-advertising approach still applies. Google (GOOG), for example, paid $900 million in August, 2006, for the right to put Google ads on the site. "Facebook's been pretty limited to a niche market," says Peter Gardiner, partner and chief marketing officer at advertising agency Deutsch (IPG). "But the audience is going to change dramatically," now that membership is open to the general public.

As these networks continue to evolve, the demographic divides noted by Boyd may give way to new distinctions. Our understanding of who the users are and how they use the sites is also on the rise as research companies are cropping up to help businesses measure and interpret online behavior. Now businesses need to turn that growing understanding into smart strategies for communicating with their customers.

Maha Atal is an intern at BusinessWeek.