I've been very interested in the recent launch of a number of services that are predicated entirely on serving the needs of MySpace users - specifically, dating applications SingleStat.us and DatingAnyone that allow users to monitor changes in the relationship status of other MySpace users. I was therefore alarmed at the strategic ineptitude of MySpace in sending a C&D to SingleStat.us (TechCrunch), thus closing the site.
There have been a handful of examples of major sites C&Ding the service industries that grow up around them from defensible strategic motives - for example eBay killing BiddersEdge in 2000 (ZDNet) was arguably a sensible move to preserve eBay as the world's only digital merchandise market and secure eBay's now-unassailable network effect. Mostly, however, the growth of service economies around a site provides a net benefit to the users of that site and enhances the value of the core site - the bricks & mortar eBay resellers, the AdWords optimisers, Craigslist Pro, add value to eBay and Google and Craigslist. This is, I believe, one of the things Umair means (big ppt) when he asks "what if you let others in...and they build you a house?"
So with SingleStat.us and the presumably now-doomed DatingAnyone. MySpace's disingenuous contention that SingleStat.us placed an "undue burden on the MySpace servers" is effectively beside the point. MySpace is treating its network like real estate. Legally, eBay vs BiddersEdge shows us that this is something MySpace is perfectly entitled to do (disclaimer: I am not a lawyer and this is just my opinion). As a digital media strategy, it is absurd. If people want to come onto your land to build you a house, the appropriate response is not a bigger fence.