MySpace Widgets: Too dependent?

15 08 2006

Clearstone’s David Stone has a good post about “Will MySpace eat its young?”

David has a unique perspective, being founder of M Networks operated within the eBay ecosystem and Clearstone being an investor in PayPal. David has every reason to be nervous as he states, given that MySpace does not make its position on companies leveraging MySpace entirely clear – it has taken steps against these companies, but also allows them certain freedoms at times. It certainly seems like a difficult path to take from a venture capitalist’s point of view.

From my standpoint (bootstrapped venture, makes me part entrepreneur, part investor), it makes me equally nervous to see a company unable to see the big picture. Granted, the YouTube success is largely based on MySpace embedding – they’ve certainly never limited themselves to just MySpace (they’re huge all over the blogosphere) and, more importantly, their vision extends far being just being a MySpace Widget.

I would contend that you will see nearly ZERO Web 2.0, Internet success stories based strictly on MySpace. Like David also mentions, these companies typically are not fully aligned with MySpace interests – they have certain incentives to eat their children. Although some disagree referring to specific cases, overall eBay’s overall vision is to develop partners that overall support their prime directive – growing revenue.

If you want to ride the success of great Internet successes before you, you’re just being smart, but don’t strictly ride their coattails for better or worse – seems like a recipe for disaster to me.

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