If there’s one thing that is more surprising than the opportunities this competition creates, it is the initial lukewarm response from the developers who would ultimately benefit the most from it. MySpace has opened up a tremendous amount of data and realtime APIs , there are tens-of-millions of users involved, and the amount of investment in infrastructure from MySpace and their partners is significant. But since the initial December 9th announcement at LeWeb, there hasn’t been much said about it within the blogosphere and among the developer community.

Although there’s a lot to get excited about, the lack of attention among developers is somewhat understandable. The economy is leading many development shops to scale back and devote resources to one or two platforms. And with mobile, Twitter, and Facebook generating most of the hype (and funding), decision makers tend to take a “wait and see” approach to new platform opportunities. The nature of MySpace’s user base is also unique when compared to other social networks, and besides a couple social-gaming companies (e.g. Zynga, Playdom, et al) there aren’t many clear models for engaging MySpace users en masse. And to be fair, the competition is only now getting started after the holidays, and COO Mike Jones indicated on December 23rd via Twitter that the company had already begun to see submissions trickle in (although company sources tell us they haven’t yet seen a deluge of new applications, but this will likely change).

But developers we’ve spoken to are nevertheless slow to respond to this opportunity, and this reluctance is misguided for three reasons. First, there are the numbers. In the example of MySpace vs. Twitter, MySpace’s userbase is still 2-3 times larger than Twitter’s in the US. That means more potential engagement (and revenue) for applications built at this stage, which could also have huge possibilities for applications that socialize content beyond the MySpace website. Second, there’s the opportunity for substantial revenue. MySpace’s user data is still of great interest to record labels, movie studios, and blue-chip brand advertisers, all of whom might be willing to pay a little more than the .99 cent application du jour that most developers are building for iTunes. Lastly, there is simply less competition on MySpace’s platform at this time, giving early entrants a huge competitive advantage if their application catches on.

With more users, more revenue potential, and less competition, this blue ocean of an opportunity might very well be one of the best bets of the year. Developers who might have at first discounted this MySpace’s platform should take a second look and consider the opportunities.

As the competition progresses, let us know if you or anyone you know has entered the competition with an innovative idea and we’ll be sure to follow up.

Update: Here are the contest details (released this morning) via that MySpace developer blog.

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You can explore the application here and download the screensaver here.

This isn’t the first realtime view into MySpace to hit the market recently. Earlier this week, Collecta released a realtime search application dedicated exclusively to MySpace’s stream data.

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