I was talking with some folk earlier this week about which large companies had responded effectively to the internet and our surprising conclusion was that none of them had capitalised on the web opportunity as well as startups (Google, Facebook, Yahoo etc.), but we did say that three or four years ago News Corporation looked like maybe they would. They had acquired Myspace, done a search deal with Google that more than covered the purchase price and had a couple of smaller things on the side.
Fast forward to now and News Corporation is mostly notable for trying (and most likely failing) to push paywalls for their news properties.
The main thing that went wrong for them is, of course, Myspace. Myspace has largely failed to innovate, and their attempts to build out Myspace Music were more aligned with the interests of the record industry than consumers, and were hence always likely to struggle. By contrast, Facebook has rolled out a number of major changes to their offering and reaped huge rewards as a result. Their execution hasn’t been flawless (we all remember Beacon…) but the newsfeed, opening up the application platform, and Facebook Connect and the Like Button have all been impressively implemented.
All this goes to show that even if you have scale and a solid business execution is everything. If you are a smaller business that is doubly true.