When Rupert Murdoch acquired MySpace four years ago for $580 million, there were questions whether the septuagenarian media baron would kill the Internet site's phenomenal popularity.

Now, the latest figures suggest that might have happened. The latest figures, reported here, showing ComScore reporting 70.28 million US uniques for Facebook (up 97% year over the year), compared to 70.26 million for MySpace (down 5% year over the year). In other words, Facebook nearly doubled the number of users, MySpace went backwards.

What caused this? Analysts have told the Los Angeles Times that much of it has to do with the MySpace fixation on its portal strategy portal strategy where it tried to amass an audience around entertainment content. Facebook went the other direction and maintained its focus on features that enhance the social-networking experience. Facebook was able to innovate, MySpace wasn't.

A reduction in audience will inevitably create speculation about a decline in ad revenue. Given that the online advertising market has dried up, it will only increase the pain.

Still, that's not to say MySpace is going away. And Facebook still has to turn a profit. As I pointed out in this blog entry last month, Facebook and Twitter are living on bailouts (the banks should be so lucky) and will have to radically change their business models if they are to survive.