Rupert is winning.
Something doesn't feel right about this. We don't ask questions; we're just happy that the internet is "free." Google and Yahoo provided the model that we now live by: we provide the "content," they provide the ads. Our "content" can now be broadly defined as our lives, our personalities, our music, our art, our friends. In the MySpace context, music sites serve as content *and* ad--but that's just how art naturally is.
Does this make us better consumers? Art appreciators? A better-networked society in which all the people who like funk find all their local funk musicians? It probably does, right now.
But as a true pessimist, I see a decidedly limited system for the dissemination of "content" controlled by Rupert Murdoch's News Corp. The internet was supposed to tear down barriers and give every man, woman, and child a voice. How strong will those voices be if all the blogs are hosted by Google (Blogspot) and all the music is hosted by Rupert (MySpace)?
I'm not sure about how to solve this problem. A bunch of dudes who worry that Craigslist will go corporate--Craigslist is now 25% owned by eBay--set up their own alternative, [can't remember site name right now]. Maybe competition for content will spur development like what we've seen in the photo-sharing market (Flickr, Snapfish, Webshots, etc). As with any other industry, though, I think that MySpace's dominance of "social networking"/forced advertising sites is dangerous.
I lament that many excellent musicians are so willingly taking part in the fiasco without providing alternative sources of information about their craft--the kind of stuff that you used to find on their own websites.