Move Over, MySpace
Is there redemption in cyberspace? That's the question for Brad Greenspan, a 32-year-old Internet entrepreneur who started his first business from his dorm room at the University of California at Los Angeles and helped launch one of the Internet's biggest hits, the wildly popular social networking site MySpace.com (BW -- Dec. 12), when he invested in it in 2003. Today he's backing what he bets will be the Next Big Thing: a social network site called Vidilife that is using online videos to lure Net surfers, a sort of MySpace for the video crowd. Traffic has been promising so far: 220,000 unique users in October, six weeks after launch in September, according to Internet ratings agency comScore Media Metrix. That's a far cry from MySpace's 24.3 million unique users but not bad for a site with no marketing. "Can [Greenspan] catch lightning in a bottle twice? Probably not," says John Tinker, senior media analyst at ThinkEquity Partners LLC. "But that's a lot of traffic for a site I didn't know existed."
Greenspan may be on to something, especially now that every kid at a PC can put video online. Web sites like Heavy.com get 10 million users in a month, much of it to see videos made by some amateur Steven Spielberg. The idea isn't so very dissimilar from the instant-community allure of the Internet and what made MySpace so popular. Vidilife may not always be tasteful -- lots of videos of girls, some scantily clad -- but it's still likely to draw the under-30 singles crowd.
VIDILIFE IS MORE THAN JUST A BUSINESS move for Greenspan; he needs it to help restore his street cred as a Net mogul. That's because he never got to celebrate MySpace's huge success. He was forced from the company he founded, eUniverse, only months after he spent $1 million to finance MySpace's launch. Greenspan battled with board members, who changed the company's name to Intermix Media shortly after his departure. Among the disputes: restated earnings during his watch that prompted an informal Securities & Exchange Commission accounting investigation (now closed) and a temporary delisting of its stock by NASDAQ. Separately, both the company and Greenspan settled charges with New York Attorney General Eliot Spitzer in September that they inserted spyware on unknowing consumers' Web pages. Neither admitted guilt.
Greenspan, who concedes he took his eye off operations while eUniverse was expanding, says in a lawsuit that he was forced out by then-eUniverse executives who allied with venture capitalists to protect their own jobs. Intermix called the suit "meritless" in an SEC filing but declined comment to BusinessWeek. In addition, Greenspan twice tried to retake his company in proxy battles, including a futile gambit in September to trump a $580 million bid by News Corp. (NWS ) for Intermix. "It definitely was a wild ride, and I learned some lessons," says Greenspan in the lounge at L'Ermitage Hotel, dressed in jeans and a silk shirt and sporting a five-day stubble. He made more than $47 million from the News Corp. acquisition, but a successful launch of a site to rival MySpace could be the ultimate comeback.
Vidilife looks a lot like MySpace, right down to the tool bar that directs users to browse for members, blog, or join a club. And the idea for Vidilife was brought to him, says Greenspan, by an ex-MySpace executive. Down the road, he says, he aims to launch a new site for families and will probably bring in partners with big money to help him expand further. "I don't have any illusions that I can overtake [MySpace]," he says. "I just want to have the best video service I can." Maybe so. But in the sizzling world of social networks, in which technology makes gratification instant, Brad Greenspan could yet have a shot at the redemption he seeks.
By Ronald Grover