I saw the Techcrunch article yesterday and refrained from voicing my opinion. However, I saw this post today and thought I might as well chime in on the conversation. In short, I totally agree with the notion that Myspace is on the verge of utter stupidity for thinking they can take out all the middlemen. I agree- occasionally, CEO’s say stupid things. Seriously, do they really think replacing Youtube with their own product will benefit them? Myspace- get a clue. Focus on what you are good at- social networking. Let people build all the widgets they want for Myspace. Everyone else is putting out API’s. Think “crowd sourcing.” It is simply impossible for your company to innovate as fast as all the developers out eager to build on your product. If you shut down the use of myspace widgets, there will be a strong backlash from your users and the developer community. Don’t make the mistake of thinking you will never have any serious competition in the social networking site. Friendster made some mistakes and lost steam. We know you are not immune to making mistakes- no one is.  Having NewsCorp’s CEO, Peter Chernin, say something like this proves it-

“If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flickr, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace. Given that most of their traffic comes from us, if we build adequate if not superior competitors, I think we ought to be able to match them if not exceed them.”

It’s not impossible to think someone will come along and overtake myspace. Facebook has potential as do a handful of other sites (if you want to know more about the others- check out Mashable). The beauty of social networks is this: once they reach the tipping point, they can rapidly grow. Myspace can be overtaken in months, not years. I’ll seriously laugh if & when you lose the social networking market given how large a lead you have now.