Have you asked users why they abandoned Myspace? Most of them would say because of its extremely annoying ads. There was a buzz going on that Myspace was ugly and full of advertisements, but you had to use it anyway. Even hackers were forced to turn off ad busting tools or otherwise the Myspace music player wouldn't play music. That was harsh style and it drove the early adopters away.
The other issue was the Myspace design. No, I'm not talking about the animated GIFs. The way Myspace by mistake became the best skinnable social network of all times was a big bonus and would have kept at least all visually oriented people on it, because, after all, there were plenty of good, seriously well-designed profiles on Myspace.
No, it was the incredibly ugly default design that hurt just those visually oriented people. The moment you clicked on any function which wasn't the profile display, grotty old-school HTML designs would appear. And by grotty I mean much worse than this website.
And then came spam. Myspace was never really good at fighting automations and several communication channels within Myspace became massively prone to social marketing, malware or plain spam. Also back then users still had to learn the lesson that it's a bad idea to input your social network password into some other website, just to get your profile skinned or find out who's been checking it out.
Facebook instead was boring in its pale whiteness, so I was most surprised that all the cool Berlin nightlife folks suddenly turned their backs on the extremely well established Myspace and started rebuilding their social graphs on Facebook. But it happened.
Myspace's calendar feature had been important, but Facebook's was better. Also, Facebook had this nifty timeline of commentable status updates that Myspace retrofitted faaar too late. That was a major killer feature at the time and still is.
Musicians and music lovers were probably Myspace's longest lasting customers. The builtin mp3 player was a powerful tool that never really took off in Facebook. It's all about Youtube clips in Facebook. But then Soundcloud came along and became the new safe haven for music industry and amateurs.
So let's look at Michael Jones' points. Starting a new brand would have helped? No way. Myspace's graphic relaunch arrived too late and it didn't pay respect to its biggest asset: the truly personalized profiles. Myspace should have kept that messy profile HTML and CSS code, simply because that was the API. That was the interface the community had adapted to use, no matter how ugly, in order to make their profile their digital home. The moment I saw the relaunch I knew I no longer had any business to do on Myspace.
Fixing Myspace's default layouts and reducing advertisement could have maintained at least a certain number of people. The sort of people who don't mind hopping between several platforms. And it should have happened immediately when Myspace realized it was losing users, not years later.
"Utility Outlasts Entertainment", of course, 99% of Myspace users never gave a penny for exclusive concerts. But Facebook surely didn't win for its real name policy. It's useful when looking for long lost lovers, but pseudonimity has its strengths, too, and there was no real hindrance getting your social graph together on Myspace.
Au contraire, there are several folks I lost touch with, because they still boycot Facebook. Myspace's top friends feature that nobody cares about on Facebook, although it kind of exists, was extremely powerful in finding your peeps and in showing them respect. It was a big deal being in that list!
I can't believe in all of the years nobody told you these things. Even now that Myspace is history, you still don't know what went wrong.
P.S. @ulihegge asks, "why did [the users] come in the first place?"
Myspace took off as the first really popular social network, the first one where the real life and party people outnumbered the geeks and business folks, so you had to be there to enjoy the features of a social network: the event calendar was powerful. Bulletins too. You could message a girl you met at a party because you would find her as her friend's best friend, without ever asking her phone number. That was seriously news back then. And the way the profile could be skinned felt revolutionary at first. It was a perfect fit for the electropunk movement of the time. No social site has ever looked as punk again. Overboarding with large images and video clips and action, it was the first web site to require high bandwidth Internet connection just to look up a user's profile. It was rock'n'roll.
Go have a chat.