According to several sources, MySpace has decided to throw in the towel with regards to its expansion in The Netherlands. The social networking site had opened up an Amsterdam office merely 9 months ago but has now announced it will shut it down and move the Benelux operations over to its Berlin office.
In February 2008, shortly after its official launch in Holland, word got out that MySpace had tried to acquire leading Dutch social networking site Hyves. The acquisition fell through and MySpace declared it was confident that it would be able to obtain sufficient growth on the market on its own. According to country manager Derek Fehmers, the site did attract 250,000 extra users adding up to 650,000 in total since it launch, but apparently Hyves (which cites over 5 million registered users, representing about 33% of the nation’s population) was much harder to beat on its own turf than anticipated.
Fehmers also added that MySpace knew it was entering the market quite late and faced an extremely well established competitor (Hyves), and ultimately decided the added value of a local presence could no longer be supported from a business standpoint. Facebook and Netlog are now the only major players trying to obtain a piece of the pie.
In an onstage interview with Michael Arrington at TC50, MySpace CEO Chris DeWolfe stated that their international strategy was to focus on the 9 countries that bring in 95% of the advertising revenue and where it would be able to become the market leader by a margin. I guess The Netherlands wasn’t one of those nine.
Another caveat from the interview, which was republished by many Dutch news sites: MySpace is focusing its efforts in launching MySpace Music across Europe in the first quarter of 2009.
(Hat tip to The Next Web blog, photo credit Peter Evers)
I know I’m not the only one who doesn’t give a damn about the Netherlands.
I know I’m not the only one who doesn’t give a damn about stupid comments…
Hmm… I wasn’t aware that MySpace was in the Netherlands. But, was it practical for them to have a physical presence there when they already have an office in Berlin (which is not too far…)? Besides, they already knew about Hyves strong presence in the market. In every country, there are individuals who would prefer MySpace compared to a localised social network site. In the Netherlands, there are heavy Hyves users, and there are also heavy MySpace users, of which the former outweigh the latter at the moment. Why not try increasing the number of users first, before setting up an office over there? If MySpace has a significant number of users from the Netherlands, they may not even need a permanent physical presence to attract ad dollars. With VOIP, the internet, + affordable air travel, business transactions can be conducted anywhere, anytime. A physical office set-up (when it is not necessary) is so old-school
It is easier to gain support in a local community if you are giving back, meaning employing people in Holland in this case.
is there a point in Hyves having a US office if they have one in Mexico, Germany and the Netherlands are completely different countries, its not location, it’s culture. You americans don’t know enough about the world that u are constantly trying to invade. Learn more about the world, then u would have a better chance of capturing their ‘hearts and minds”
A social network called “hives”. Perfect match for Myspace, too bad it didn’t happen.
Well, Vlad, it “could have been” possible for MySpace to break into the Netherlands market. Is it possible for any companies to take on the world. But, they have to “go global”. By that I mean a start-up team consisting of members from diverse background – so that there’ll be less cost incurred in the overseas hiring process. A start-up team consisting of members from the US, Europe, Asia and the Middle East will be much more well equipped to build a business empire compared to an all-American, all-European or all-Asian group.
But on the other hand, entrepreneurs can’t just get any Tom, Dick or Harry to be their biz partners – because that would be tantamount to a business suicide! Hence, there is a great deal of opportunities out there for bloggers and freelancers around the world – as more and more entrepreneurs look toward bridging the “skills” gap within their own team
– via cost effective means – cost-effective viral marketing (bloggers with broad audience reach might just do the trick) & cost effective product development/improvements (eg, hire a freelance Ruby on Rails programmer at half the cost of a full-time programmer).
I bet DeWolfe walked in on them all stoned out of their minds on pot in the office half naked and shook his fist at them doing his best impression of daddy Murdock, then fired them all and put police tape over the doors.
Then he praised the Germans for their stoutness and business sense.
stupid americans thinking they could just take over another country social network
Foreign governments won’t let American companies simply come in and generate revenue.
They force those American companies to set up shop there and hire local people and to have a corporation lead by natives of the country there to do business in that country.
Such as Microsoft Canada board members are not the same as Microsoft USA board members.
So what usually ends up happening is that N company of X foreign country wants to usurp some American brand cash, so they set up Y branch of Z American company trying to leverage the American brand name in their nation.
This employs people that would otherwise be out of work and possibly on unemployment or homeless in their less than great country.
When that doesn’t work the company will operate outside of the country and pay import/export taxes which often times are super heavy handed. AFA selling internet advertising across borders, I’m pretty sure they can get around that pretty easily.
That is not the case when you sell physical goods in another country. Such as boxed software. In that case you need a distributor there at the very least because the border tariffs are set to force companies to do business in that country whether they like it or not, in order to have access to that market.
Again, in the case of selling virtual goods such as adverts, this is most likely bypassed completely, or passed on to advertisers who have no choice but to pay the international markup to do business with that big brand.
Global business strategy is far more complex than saying our people’s product is better.
Well put sir.
Chris and Justin, you dicks. So all foriegn governments force the big bad USA to open a physical office if they want to trade there? Dickheads
I don’t know about you but if Google came by asking for my site, I’d ask for twice or more as I would if some nobody came looking for it. But I am sure the people of Holland have better things to do than playing with MySpace.
lol well only the foreigners go to the coffee shops and red light districts…so maybe the dutch don’t have better things to do?
I guess they went there b/c one of the founders of Myspace dutch origine. Looks like that’s not enough to beat competition.
I think the title is misleading. It should read Netherlands gives up on MySpace, leading to MySpace shutting down its local activities in the Netherlands. The space for social networks is tiny in this part of the world, especially as the revenue sources are still unclear. People dont mind getting ads when they are searching for something, if the ads are relevant. But getting ads when you’re looking for friends? I’m not convinced.
Hyves is very profitable.
I think the dutch people don’t see advantages to be on 2 social websites. All my friends are on hyves, all my musical friends are on both. But mostly have myspace to be found for musical purpose. Myspace is made for networking for musicians. Not for the regular dutchmen.
As the popularity of social media continues to rise, particularly within the business realm, I believe that MySpace could have a significant presence in the Netherlands despite competition. However, with so much opportunity for remote growth, the company made a wise decision by shutting down the office.
Courtney Gager,
http://www.mile...echnologies.com