Dare had an interesting post about how the COO of News Corp (parent company of MySpace) came out and said some disturbing things about MySpace’s role in the internet ecosystem.

From COO Peter Chernin:

“If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flickr, whether it’s Photobucket…almost all of them are really driven off the back of MySpace, there’s no reason why we can’t build a parallel business.”

Pete Cashmore correctly points out that Flickr probably had little success on the back of MySpace. I’d also add that digg, del.icio.us, writely, gmail, google maps and the vast majority of Web 2.0 sites are not driven off the back of MySpace – so Chernin is making a huge overstatement. Admittedly though, Photobucket and YouTube are good examples of businesses MySpace could probably kill (or substantially wound) if they wanted to.

The first thing that came to my mind is: Why would MySpace want to build a YouTube if 60-70% of YouTube’s traffic already comes from MySpace? YouTube also doesn’t make money. So, they could potentially grab the 30% of YouTube users who aren’t also MySpace users (I’d guess it’s even less than that, depending on how they did the original calculation), struggle to find out how to monetize them, and inherit the extra $500,000-$1million a month in bandwidth costs for serving all of those videos themselves. I guess it could work out, and sure they’d have more control, but it doesn’t seem like a particularly great move.

Pissing off your developer ecosystem is a tried-and-true strategy for failure (I read In Search of Stupidity a few weeks ago, which served to further drive that point home). However, I disagree with Dare when he says this:

“One of the reasons MySpace is where it is today primarily because they stumbled upon the fact that providing a platform for gadgets/widgets allows for richer end user experiences…”

I don’t think that’s really a big factor in MySpace’s success, which is why I’m not convinced that pissing off their developer community will result in utter failure as it did in the past for companies like Ashton-Tate. Browsing MySpace, I generally find that the only “widgets” people use are:

1. The embedded (Myspace-provided) music player
2. A fancy layout from a site that sells/gives away myspace layouts
3. An occasional embedded picture hosted by a site like photobucket (hardly a ‘widget’)
4. An occasional embedded movie from YouTube
5. An occasional slideshow widget for pictures

That’s pretty much it as far as mainstream “widgets” go. There are a lot of companies building widgets, but I don’t see a lot of people using them. So, I find it hard to believe that MySpace owes any significant portion of it’s success to it’s development community – with the notable exception of the myspace layout folks, who obviously don’t have a business apart from myspace.

It will be interesting to see how this plays out, but my feel is that MySpace can probably get away with shutting out developers and still do well for themselves. Although it would potentially open doors to competitors, it would take a revolutionary social networking site to overthrow MySpace at this point.