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MySpace has taken yet another step to follow some of the strategies proved successful by its newly legitimized (and recognized) source of competition, Facebook. The company has announced it will open up its network to outside developers to build a more robust set of applications.

Previously there were approved widgets that worked on MySpace, such as photo slide shows and music players, but it was essentially a closed environment. Facebook, you probably remember, opened its doors to outside developers last May, which has considerably boosted the site experience and popularity.

As it was for Facebook, this will be a good move for MySpace. As we wrote about last month, MySpace’s longstanding dominance in the social networking world allowed it to get away with a famously sub-par interface. That began to change recently when MySpace slowly rolled out a new look and feature set that have, shall we say, a familiar face.

This too is clearly a reactive move to Facebook, despite comments from the company to the contrary (“It didn’t really have an impact [on us],” founder Chris DeWolfe told The Wall Street Journal yesterday).

MySpace still has a commanding market share with 69 million unique monthly users, compared with Facebook’s 35 million, according to comScore. But Facebook’s 81 percent growth rate in the 12 months ended in December can’t be ignored. Compare this with MySpace’s 13 percent growth rate during the same period — a considerable slowdown from the nearly 100 percent growth the site had experienced the year before.

MySpace can feel Facebook nipping at its heels. If it can curb the slowdown in its own growth rate, it will be able to maintain its market share lead for quite a while longer. But there are clearly new standards emerging in social networking and it will have to think and act quickly, and differentiate itself in new ways rather than play catch up.

Local could be one important battle ground (of many) for this to happen.

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