Reading about the brutal lay offs at MySpace last week sent chills down my spine. It comes only two months after a new CEO, a former Facebook exec, took over from MySpace's founding CEO. It sounds like fodder for those "tell-all" books about a business in crisis.

But I wanted to get beyond the tech-pundit autopsies and see what lessons I could apply to our own company, Paltalk, a video-based community. Despite all the press covering MySpace, from its sad launch of MySpace Music to its recent traffic decay (ComScore reports it lost 5% of its U.S. unique visitors in May), I searched for a single, simple answer that could explain this decline precisely -- frankly in the hopes of avoiding making similar mistakes. Despite my efforts, I failed in finding any analyst who provided the "silver bullet" answer I had been seeking until, that is, I met up with the 16-year-old son of a colleague who happened to be in our office one day.

This fresh-faced young man came in with his expected teenage uniform -- jeans, T-shirt and PC. He was quietly but intensely doing something on his computer when I started to talk about how we use our Paltalk Facebook group and I must have snagged the young man's attention because he lifted his head in interest. Seeing an opportunity to learn from him, I started to ask him what he thought of Facebook. "Oh," he said, "all of us in school are on Facebook now. Yeah." And then he added on his own, "We all stopped going to MySpace. No one ever uses their real name on MySpace."

That 16-year-old accurately put his finger on the heart of the problem: MySpace has failed to find ways to help users establish connections born of a trusted bond. As a result, MySpace became a haven for spammers and the trust-decline spiral began.

Before you skeptics reject the simplicity of this answer, consider MySpace's fate with that of Facebook and the answer becomes easier to fathom. Facebook started as a way for college kids to connect with their trusted peers (trusted only in the sense that they went to the same university, but hey -- trust is fluid depending on the context). These students already shared a bond, they were already part of an existing community and Facebook provided the platform that let people bolster these sticky connections. Further, as Facebook grew it was able to attract a mass audience because it expanded by staying true to its very DNA -- its ability to let people make trusted connections. It was a killer strategy and a risky move, but it is now paying off just as, paradoxically, MySpace seems to be feeling its way through the digital dark.

If one tests this theory to see how it stands up in real life, we see this principle operating at many of the most successful social networks out there. For example, LinkedIn thrives as a professional network because you invite "trusted connections" and video-based communities achieve a higher level of trust than a text chat community because one can see who one is talking to. These are just a few different strategies to achieve a similar goal -- create ways that let people bond with each other and within communities.

The take-away from the MySpace experience is that in the community-building business, communities based on some level of trust are probably "stickier" and more valuable than a community with little or no trust.

Article written by
Judy Shapiro
Mrs. Shapiro is senior VP at Paltalk and has held senior marketing positions at Comodo, Computer Associates, Lucent Technologies, AT&T and Bell Labs. Her blog, Trench Wars, provides insights on how to create business value on the internet and has inpsired a series of the WebGem Blogs ive written
-Denny