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In the summer of 2003, after being bombarded by constant online articles about the growth of the social networking site Friendster, I realized it was time for our company to take a shot at creating a competitor. My company eUniverse launched Myspace.com in August 15, 2003. I was the founder, Chairman, and CEO of Los Angeles based eUniverse. I was also the largest shareholder of eUniverse with 30% ownership which also effectively made me the largest ever individual shareholder of Myspace (as eUniverse owned 100% of Myspace)

I had started the company in 1999 initially selling music cds online. I grew the company thru a series of acquisitions and new web ideas we launched, morphing into a diversified entertainment company. In a few years, I had assembled a number of valuable internet assets including Flowgo - a leading entertainment network of sites featuring millions of flash videos viewed and games played each day, Skilljam.com the leader in pay2play gaming partnered with Microsoft, CupidJunction.com – a dating site with 3 million registered users, and some ecommerce websites.

I looked at what I had created at eUniverse as a sort of portfolio of internet assets

that we could nurture and then spin off into independent internet companies which all the shareholders would participate in.

By 2003, eUniverse had 300 employees. A big key to our innovation was my focus on acquiring companies and getting the entrepreneurs to come aboard. I would then work closely with them to help take an idea or product they already had to the next level (like we did with our gaming website Skilljam – now part of a $400 million publicly traded company) or build a new team drawing from across out internal pool of talent to focus on a new idea I thought would be successful and wanted to build (such as what I did with Myspace).

We were very well positioned to launch a competing social network and blow past friendster. One huge reason was our large number of users:

We already had a huge online user base with which we could immediately use to promote any website we created providing a huge jumpstart and critical mass. As of August 2003, Comscore reported that we had 18.6 million monthly unique web users and were the 20 th largest internet Property in the United States. In addition, we had one of the largest email databases comprised of 50 million users that had signed up for our email entertainment newsletters. From day one we used eUniverse's vast audience to promote and jumpstart Myspace.com.

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As eUniverse got well known in Los Angeles, and with Sony as one of my key investors, I was able to get better and better guys to come work for me. Most high level managers I hired were excited to work on projects for a company that already had such a huge user base.

I began meeting in the summer of 2003 with different division employees at eUniverse to discuss who was enthusiastic and had available resources to quickly build our own version of Friendster. We would launch a basic site quickly, get proof of concept thru beginning to promote to our user base and if it showed any traction, we would put all of our resources behind it in increasing fashion.

As Chairman, CEO, and the largest shareholder (I owned 30%, Sony owned 12%, and the rest was in the hands of the public), I had the fun and privilege of overseeing and directing all new websites or initiatives. I launched our new ideas based on the strategies I thought would be winners for our company. In the summer of 2003, while we had a large number of users and other assets, our cash in the bank was only a couple of million dollars. We were in the process of raising more capital, but never the less, I determined to muster our resources and make one big bet without waiting around – Myspace! The only new web initiative that I decided was worth the risk of launching in 2003.

As I sat down in a series of meetings with employees to discuss Friendster, communities and, social networking strategies, it became clear that a lot of my management team wanted to launch a Friendster like product. There was so much enthusiasm already around Friendster, it didn't take a genius to realize that with our audience, technology and marketing teams we had as good of a shot as anyone to surpass Friendster.

I met with a few different groups inside eUniverse to figure out who I was going to bet on. There ultimately were two choices: Toan Nguyen from Flowgo Network or Chris DeWolfe & Josh Berman from the ResponseBase division.

I decided to let DeWolfe and Berman lead the project based on their enthusiasm and promise to get a barebones version launched quickly. DeWolfe and Berman had worked for me on multiple projects since they joined eUniverse in 2002. I enjoyed working with them!

Soon after, I had Toan Nguyen jump in and join the team to build out and re-archeitect the website when it was clear the version DeWolfe and Berman created was breaking under the initial surge in traffic.

During these meetings, it was discussed and determined that we would use an existing eUniverse owned url called Myspace.com for the project as a working title. A few weeks later, DeWolfe and his team included Tom Anderson suggested we change the name to eUniverse as we were putting the business strategy together. I liked the Myspace brand and shot that idea down.

It only took a matter of days for our company to get Myspace.com v1.0 live. Friendster was a very basic website so copying its core features was not a big technical hurdle.

I knew that the bigger challenge would be to figure out a solid long term gameplan to take Myspace to the next level via a well thought out technical/feature/promotion plan. So even before Myspace v1.0 was launched, I was already brainstorming with DeWolfe, Berman, and their #3 Tom Anderson on the plan for Myspace v2.0 and asking them to take the first crack at summarizing some plans we could use as a starting point for future decisions.

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Shortly after the Myspace site was live, the eUniverse employees all began signing up for the service and telling their friends. We even launched a contest for employees. Tom Anderson, originally a ResponseBase division employee, is also seen here sending an email to all eUniverse employees with an update on the contest, recognizing he is an eUniverse employee and Myspace is an eUniverse initiative.

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In late August, Chris DeWolfe informed me that the Myspace website was starting to show the downside of its quick launch. With new users streaming into the website, it was starting to slow down and break. This was the same trouble that Friendster has smacked into.

Another significant advantage that eUniverse had over Friendster or another startup was that we had developed an infrastructure which could be used to incubate and launch new projects such as Myspace drawing on a very deep and talented roster of employees to overcome any obstacles we encountered.

A few days after we had launched Myspace v1.0, one of the best tech stars in my company Toan Nguyen, who worked in eUniverse's Flowgo division, informed me that he had went ahead in his spare time and created his own superior version of Friendster. I was impressed by how advanced NetFriendships was and how its features were already superior to Friendster and the crude version of Myspace we had launched.

Toan indicated he would love for eUniverse to take over the site so we could work with him on it. While I was quite impressed by Toan's tech skills and understanding of how to build a social networking site, and more impressed that Toan would build it in his free time because he believed so much in the social networking opportunity. In addition, Toan was more experienced at building community/content than anyone working on Myspace.

However, because we had already started promoting Myspace and put resources behind it, I asked Toan to join the Myspace team and help us fix the problems the website was facing. Toan was an incredible team player and at my direction to Chris DeWolfe, Toan

jumped into the fray in the beginning of September 2003, a couple weeks after the launch.

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Within a couple of weeks, Toan led the creation of Myspace v2.0 which was finally a stable website. This was the archeitecture that would stay in place going forward as the growth of Myspace exploded. As valuable, Toan also shared all his NetFriendships.com features & technology with our Myspace team, allowing for quick strides in making Myspace a better product.

As we entered September, our initial promotion of Myspace had jumpstarted the website and it was growing quickly. We were following our competitor Friendster closely, and they announced in early September that they had raised money at a large valuation. This further emboldened our efforts and focus on Myspace.

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I asked Chris DeWolfe to prepare a first crack at his ideas on the business model for Myspace. Chris working with Tom Anderson who had previously wrote copy for ResponseBase ebooks teamed with Chris on the draft.

I agreed with the conclusions the Myspace team had in terms of all the upside potential of the project and the fact that with eUniverse's huge audience we could blow past friendster.

However, I didn't agree with Chris DeWolfe and Tom Anderson's proposal to make Myspace basically a paid service by charging for many of the basic features used to communicate with other users. Their proposal would make Myspace a paid dating site.

I realized this business strategy would slow down the growth and likely kill Myspace. Thus, when we finally sat down and jumped into the document they created, I informed them that I was 100% on board to make Myspace a huge play of eUniverse's via pushing our users into the social network. However, I told them we would need to keep Myspace free. The free model turned out to be a huge winner! In addition, I didn't like their concept to name the site eUniverse. Myspace was a much better name! And since we were already growing so quickly, I subscribed to the ‘if it ain't broke don't fix it!'

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As we stabilized Myspace via the launch of v2.0, we were able to think more about features and started really ramping up promotion.

A couple features we launched in the new version of Myspace including adding a games section on the site which gave users reasons to spend more time on the site and also creating a GROUP feature which I had seen become the basis of a whole site called MEETUP.com. New ideas & features from myself, Toan, Chris DeWolfe, and Tom Anderson helped set Myspace just enough apart from Friendster.

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Another luxury that our Myspace project had was that as a division of eUniverse, our existing infrastructure did all the work involved with procuring new equipment and financing that was vital to keep Myspace humming. Instead of having to build out this piece of Myspace via new hires and soaking up management resources which causes growing pains in a true startup, the Myspace division was able to just leverage the eUniverse personnel as we ramped up buying hardware for it.

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Myspace was starting to grow very quickly by the end of September. We were adding about 6000 new users per day and growing quickly. Page Views were also exploding.

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With the site stable, and as we entered October, we started promoting Myspace to our eUniverse users even more aggressively. One of the biggest steps we took was to promote Myspace as a free dating site to our 3 million Cupid Junction registered dating users. It was the equivalent of committing suicide for our very profitable Cupid Junction dating site, where we were trying to get users to pay to contact people they wanted to meet. But CupidJunction was a second tier dating site that had already missed its chance to become #1 because it had started so late in the dating game. With Myspace, I knew we had the chance to become #1. I decided we would roll the dice!

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Myspace continued to grow even quicker in October and never slowed down. The basic service/look/feel of Myspace didn't change much from v2.0. The ability for Myspace to continue to grow in the subsequent months was due largely to keeping the website up and working even as growth swelled. This was largely due to the efforts and resources available to Myspace from the rest of eUniverse.

I was forced to leave eUniverse at the end of October as a Venture Capital (VantagePoint Ventures) firm fraudulently took control of eUniverse and Myspace. This VC firm brought in a new CEO Richard Rosenblatt who instead of continuing to promote Myspace with eUniverse's resources, decided to sell off big chunks of Myspace for next to nothing. Later Rosenblatt sold everyone down the river and sold Myspace to News Corp for peanuts in exchange for cash under the table.

Then Richard tried to launch his own social network called Grab.com and effectively ended eUniverse's promotion of Myspace in late 2004 and focused it on his Grab.com social network. Is was one in a series of horrific decisions by Richard and the VC.

HOW CHRIS DEWOLFE , JOSH BERMAN, AND TOM ANDERSON FIRST BECAME SHAREHOLDERS IN MYSPACE IN DECEMBER 2003.

While we had raced to launch Myspace.com without worrying about getting too focused on personal economics. However to retain and optimize good talent, ultimately, a structure had to be figured out to incent everyone working on the Myspace project inside eUniverse.

As we launched Myspace, I continued to have Chris DeWolfe and Josh Berman of our ResponseBase division manage Myspace on a day to day basis for eUniverse. ResponseBase generally focused on ecommerce (selling electric scooters and gadgets).

eUniverse had purchased ResponseBase in 2002. As part of the acquisition we paid the ResponseBase team about $3 million dollars in cash and agreed to give them an earnout or 15% share of profits they generated working for us over the next 2 years.

As we launched Myspace, eUniverse owed ResponseBase managers several hundred thousand dollars from their earnout performance that was now due. In addition, I estimated we would pay a couple million dollars in future earnouts as ResponseBase was still generating lots of profits for eUniverse via ResponseBase's ecommerce websites.

DeWolfe and Berman realized we were not cash rich until our next round of financing closed which was a few weeks away.

While eUniverse owned 100% of Myspace, Chris DeWolfe and other key ResponseBase employees were spending a significant portion of their time working on Myspace. With everyone seeing the tremendous value we had created, there ensued some lengthy negotiations with Chris DeWolfe leading the attempt to effectively get some initial equity orapiece of Myspace from eUniverseby attempting to swap their existing earn-out and money we owed them. They were smart guys!

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I recognized the hard work of Chris DeWolfe and the other members of his team involved and working on Myspace. Therefore, I proposed a deal in early October that setup Myspace as a seperate business unit and would let any Myspace employees share in 10% of after-tax profits. This was a pretty standard bonus structure for a division's managers.

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As this discussion was ongoing, two senior eUniverse executives that I had recently informed would be likely leaving the company based on poor performance became very jealous and angry as they watched likely new compensation deals for guys like Chris Dewolfe get negotiated. These senior officers: Brett Brewer and Chris Lipp would later accept bribes (keeping their jobs and tens of millions of dollars in stock options) from Venture Capital firm Vantage Point to defraud shareholders via selling control of eUniverse below market prices.

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Chris DeWolfe and Josh Berman continued to push very hard to get some equity in Myspace. They proposed eUniverse allow them to invest and they would effectively invest by foregoing all the cash owed to them thru the ResponseBase earnout.

In the ensuing weeks of discussion, it became clear that eUniverse was on the verge of raising significant new capital. Thus, from my view as a shareholder of eUniverse and owner of Myspace, it made more sense to just pay Chris DeWolfe and Josh Berman the cash that was owed to them, and just have them participate in a management bonus/earnout structure with Myspace. I continued to tell Chris and Josh that this was the only deal eUniverse would do with them.

Luckily for Chris Dewolfe, Josh Berman, and Tom Anderson, I left eUniverse and they got to negotiate with a new management team. The new management team of eUniverse clearly did not believe in Myspace, even with new millions of dollars in available cash in the bank.

Eager to save a bit of cash, the new management team led by VC VantagePoint & Brett Brewer quickly struck a deal to trade 33% of the ownership of Myspace to Chris DeWolfe, Josh Berman, and Tom Anderson in exchange for not having to pay them the outstanding cash. A coup for Chris DeWolfe and his team while at the same time the first in a string of unbelievably bad decisions made by the guys that took eUniverse over from me to fumble away tens of billions of dollars.

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