MySpace will open up to third party developers within the next few months.
Facebook opened up its APIs in May this year and has been rewarded with a flood of applications written by third parties for the site.
Although MySpace still claims the number one social networking spot, Facebook has seen fast growth this year as it entered the mainstream from its previous audience of students.
Speaking at an industry event in San Francisco, MySpace chief executive Chris DeWolfe said: "The idea will be to allow outside developers to tightly integrate their applications into MySpace.
"There is going to be paid revenue opportunities for all the developers."
Murdoch, speaking on the same platform, said MySpace revenues for the year ending June were likely to be lower than expected at $750m, rather than the $800m previously expected.
Referring to the orgy of press coverage of Facebook's every move, Murdoch said: "In spite of all the hype we seem to be growing faster."
Murdoch's News Corp paid $580m for MySpace in 2005.
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