Is the coffin closing on MySpace?

But, where are they now? Lycos, Infoseek and Excite sold for a combined $22+ billion at their respective peaks, yet all proved unable to sustain themselves much past Y2K.

After a quick browse of current mega-sites, one pops up that could follow a similar fate.

MySpace. 

You all know MySpace, the social network giant that popped on the scene in 2003 and grabbed every teen with an Internet connection.

It was once the king of networking sites, but do a quick search for “MySpace + broke” and “MySpace + dead” and you’ll see the cracks have been showing for a while now.

Social media sites have always had trouble turning profits (Facebook doesn’t expect to see consistent positive cash flow ‘til 2010), yet MySpace seems to be swimming against a pretty strong current.

While Facebook’s audience is booming, MySpace participation appears in substantial decline, if not by numbers than by social relevance. You probably only know a handful of people with MySpace; you probably only know a handful of people without Facebook.

Henry Blodget at Business Insider seems to think MySpace is “pretty much worthless” already, just a few years after Rupert Murdoch’s News Corp. bought the site for $580 million. (Full disclosure: Microsoft bought a 1.6% stake in Facebook in 2007.)

Now, granted, MySpace has new management that optimists believe will give it the kick-in-the-a** it needs. But after the site did about $500-$600 million in revenue last fiscal year and still lost money, many aren’t so sure.

Here’s a modest proposal for MySpace: focus on what you do best.

What does everyone know MySpace for these days? It’s become, more or less, an extremely successful platform for emerging artists: bands, comedians, artists, models.

So, why not scale things back and emphasize the feature most unique to your service?

With a dwindling market share – and let’s face it, do you know anyone that’d even consider betting on MySpace to overtake Facebook in user participation? – the future seems to be in music.

In fact, just this month Wolfmother (hardly the Zeppelin of modern rock, but still) released their new album on MySpace a few weeks before it’s set to hit stores.

Now that  is something positive for the site. Something unique that’s still going to reach a mass audience. And, more importantly, something cool that Facebook doesn’t do.

As Blodget warns, MySpace had better be careful, whatever it does. Because, how much does he guess the company might be worth as it stands?

“Next to nothing.”

By Jason Buckland, MSN Money