MySpace on the Auction Block: What Happens to User Data?

By Katie Kindelan Comment

Not long after laying off 47% of its workforce, News Corp is also likely to hang a “For Sale” sign on its MySpace social networking site, the company’s CEO confirmed to Bloomberg. But as the buzzwords around MySpace move from, “You’re Fired,” to “For Sale,” the bigger question for users is, “What happens to my data?”

News of News Corp’s desire to sell, merge or spin-off the once dominant social networking site focused on how MySpace fell so far, so fast, considering that in just 2005 MySpace was at its peak, purchased by News Corp for $580 million.

But here’s a headline too: MySpace still has millions of users, and their data too. So what happens to that data when a social networking site goes on the auction block? Does it become a corporate asset for another company to acquire?

MySpace averaged 57.5 million U.S. visitors in September, a 24 percent drop from its peak of 75.9 million users in December 2008, according to ComScore.

Even with its lower numbers, MySpace still remains a viable social network and, likely, an attractive buy.

MySpace relaunched as an entertainment hub last October, putting itself out of competition with the likes of Facebook and Google by catering more to a targeted audience of musicians and “Generation Y” users. Just last month MySpace renewed its ad deal with Google, while last year saw the site link with Facebook via “Mashup” to increase integration between the sites, and introduce the “Hijacks” program that heavily integrated celebrities into the site

Since the redesign, MySpace has gained 3.3 million new users, confirmed the site’s CEO Mike Jones in a statement, while also growing the number of mobile users by 4 percent, reaching 22 million.

So, what are the rights of the millions of current and previous MySpace users, whose data the company likely has archived away?

A close examination of the company’s privacy policy by technology blog BNET found startling results, outlined below:

  • If the company “materially changes its practices regarding collection of or use of your PII [personally identifiable information], your PII will continue to be governed by the Policy under which it was collected unless you have been provided notice of, and have not objected to, the change.”
  • MySpace needs only user permission or a “business reason” to share data and personal information with third parties.
  • There is no provision that requires MySpace to delete the information of old users.
  • “In addition, if Myspace [sic] sells all or part of its business or makes a sale or transfer of all or a material part of its assets or is otherwise involved in a merger or transfer of all or a material part of its business, Myspace [sic] may transfer your PII to the party or parties involved in the transaction as part of that transaction.”

The last bullet, BNET explains, means MySpace has the right to transfer data through either a sale of the company or sale of the data alone.

So is the far-off concern that social networking sites like Facebook and MySpace have not only access to your personal information but also the ability to retain, market and distribute it now a reality?

As the social networking industry continues to diversify and expand, could the headlines from this sale could be much more than, “Why did MySpace fail?”

Tell us what you think. Are you concerned?