A couple of weeks after Chris and Tim Vanderhook acquired the object of ridicule and pity known as Myspace for $35 million in June 2011, the board offered the daring young owners some advice: Consult an executive who had turned around a social site that had fallen off a cliff and recovered.
"I was like, 'Yeah, there are so many,'" Chris says, chuckling.
"Zero," Tim chimes in.
The Vanderhook brothers, principals of Specific Media, which they founded in college and have built into the second-largest online ad network (behind Google), know that Internet comebacks of any kind are rare. Web 2.0 has-beens Digg and Second Life haven't returned to glory. Neither have such Paleolithic stars as Excite, Lycos, GeoCities, or Myspace's oft-cited social media predecessor, Friendster. But at Myspace headquarters in Los Angeles in January, the brothers' mood—encouraged by positive buzz for their recently launched beta site, a sleek, one-stop music hub—is confident, even easygoing, a vibe these offices haven't seen in years. "It's not too daunting to think you can turn around a brand," says COO Chris, 34. "Look at Target, Ford, Apple."
"Harley Davidson," adds CEO Tim, 32. "If you give people a great product and great experience," Chris goes on, "consumers are willing to give you that second chance."
Or with Myspace, they hope, that third or fourth chance.
Once the top social media network—and for a brief moment in 2006, the most-visited site on the entire web—Myspace suffered a notorious fall from grace with the advent of Facebook. Tens of millions of users switched sites, fleeing a clunky, ad-choked, sketchy-profile-infested ghetto. Rupert Murdoch and News Corp., which had paid $580 million in 2005 for the then fast-growing network, attempted one rescue after another to no avail. "When we bought the company, it was not socially acceptable to say you visited Myspace," says Tim. "That's shocking from a brand perspective."
Likewise, the morale within Myspace was abysmal. By the time the Vanderhooks bought it for just 6% of News Corp.'s outlay, the staff had been cut by more than three-quarters and the outfit was burning through $20 million a month. The brothers were the fourth management team in 18 months. At the first staff meeting, says Chris, "I remember looking in the back of the room, seeing a guy drinking a beer, and thinking, Yep, these guys really give a shit."
The brothers cut the staff by another two-thirds, slashing costs. They recruited Justin Timberlake as a co-owner, bolstering Myspace's dormant reputation in the music community. Timberlake then did some recruiting of his own, helping to acquire talent from HBO, the Martin Agency, and the music industry, which in turn helped lure execs from Levi's and Vice Media. Then the owners piled money into a new platform with a clever design and an architecture streamlined for speed. January's beta relaunch consisted of streaming Timberlake's first single in seven years. A week later, people were registering on the site at a steady rate of one per second.
The brothers, who were ardent early Myspace users, had hoped for years to buy the fallen property. They wanted to focus on what they saw as the site's most compelling feature: the direct link between musicians and fans, which had helped boost the careers of Katy Perry and Bruno Mars. "We wanted it because of the name," explains Tim, betting that repairing a disgraced but well-known brand would be easier than garnering attention for a complete unknown. The site still had 35 million monthly users and a scalable, expensive-to-replicate technology that can simultaneously stream different songs to every user. Plus, thanks to deals with labels and uploads from indie artists, Myspace has the largest free music catalog online—more than 52 million songs.
Myspace's new owners are trying to defy some steep odds. Typically, only one out of five distressed companies recover, says turnaround specialist Matthew English, managing director of Arch + Beam, who notes how much more crowded the music landscape is than in Myspace's heyday. "They're not competing directly with anybody, but they're competing indirectly with everybody," English says. The new Myspace wants to be a central portal for creative types—mainly musicians, but also photographers and videographers—to better manage their business: promoting their work with fans, gathering data about their audience, and, eventually, selling tickets and merchandise. For fans, Myspace is supposed to be a one-stop bazaar, with free streaming channels (think Pandora) and on-demand albums (Spotify); photo galleries (Pinterest, Tumblr); music videos (YouTube, Vevo); and articles (Billboard, Pitchfork). Next, fans will earn rewards for listening and sharing playlists and win discounts on tickets and merchandise through a loyalty program.
First, the Vanderhooks and Timberlake need people—artists, fans, business partners, recruits—to give the brand another chance. "The knock on Myspace is it's dead," says Christian Parkes, who until recently was global senior director of marketing at Levi's. Parkes initially laughed at a headhunter's inquiry late last year. But after meeting the Vanderhooks and their team, he became a believer—and Myspace's vice president of marketing. "If this was easy, I wouldn't have come," he says.
With its first big push for consumers in March, the Myspace team will be watching for music fans' conversions, just as they did following the beta. "If you go on Twitter," Tim says, "you find people saying, 'I'm on the new Myspace and I don't care.'"
I don't care: a backhanded compliment, to be sure. But for the Vanderhook brothers and Timberlake, it's music to their ears.
[Photo by Zen Sekizawa; Illustrations by Robert Samuel Hanson]
A version of this article appeared in the April 2013 issue of Fast Company magazine.