MySpace, Twitter Display Danger of Coolness

When MySpace popped up in the news headlines this week, I felt a jolt of nostalgia. I thought back to those long-ago days of 2005, when Rupert Murdoch and News Corp.(NWS Quote) shelled out a half-billion dollars to buy the site that helped set off the social-networking craze. Back then, to be familiar with MySpace (or, even better, to have your own page there) was a sign of pop-culture savvy. It showed you knew what was cool.

Fast-forward four years. In the past week, MySpace announced that it's laying off 30% of its U.S. workforce, followed by two-thirds of its international staff. I realize it's been a long time since anyone referred me to their MySpace page.

Instead, all the buzz lately has been for Twitter. It got a major boost this spring, when an "Oprah" episode centered on Oprah Winfrey's debut "tweet," messages sent through the service. More recently, it's been credited with fostering freedom of speech, as real-time reports on political protests filtered out from Iran.

But -- dare I say it? -- Twitter hasn't created a great new product or tapped into a huge un-met need. It seems to be coasting largely on hype. Which leads me to wonder: Could Twitter be the MySpace of 2009?

As companies of every size search for the secret to good buzz, consider the fate of social-networking sites a cautionary tale. If you're looking to grow your business, hype doesn't make for a solid foundation. Much as we'd like to see our brands adopted by trendsetters and enter the pop-culture landscape, popularity doesn't always translate into profits. And it can vanish in a flash: For the arbiters of hip, nothing's cooler than dismissing what was cool last year.