Traffic Up At Myspace, Profit Not so Much

from the same-old-story dept

Wed, Jul 19th 2006 8:05am — Joseph Weisenthal

Back in November, it was reported that MySpace was commanding an enormous 12% of all ad inventory, which didn't seem to square with the paltry revenue numbers it was reporting. Since then it's come out that MySpace traffic may be inflated, which helps explain why it's of such low value. Now, the site accounts for 17% of all impressions, though it still hasn't got any better at making money. At the moment, most internet advertising is predicated on the idea that people will jump from one site to another if something catches their eye. But at a site like MySpace, where users stay for long periods of time, this model doesn't work so well. In all likelihood the site will never be a major cash cow for its owners, though users of the site, like bands that build up their audience through it, may find it valuable.

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WirelessGuy, 19 Jul 2006 @ 8:26am

Why should profits go up
They are busy making plans to ward off lawsuits by not being responsible enough to place some form of control that is enforceable.

I say that they should require a CC, and charge that card like $0.50 a month for the account. Since most 14 year old kids won't have a real CC, they won't be able to have an account. If the kid wants an account, then they would have to ask mom or dad and that would force them to get involved/or know what their kids are up to. Or they ban content and filter out the crap allowing 50 year olds from chatting and stalking 10 year olds.
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- Sanguine Dream, 19 Jul 2006 @ 9:34am
  
  Re: Why should profits go up
  I like the fact that you are concerned for the kiddies (and I assume you aren't running for public office) but if the possibility of having their underaged child stalked/attacked/killed by a predator isn't enough to get them involved is it likely that a monthly fee will?
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- alternatives, 20 Jul 2006 @ 4:34am
  
  Re: Why should profits go up
  I say that they should require a CC, and charge that card like $0.50 a month for the account. Since most 14 year old kids won't have a real CC, they won't be able to have an account. If the kid wants an account, then they would have to ask mom or dad and that would force them to get involved/or know what their kids are up to. Or they ban content and filter out the crap allowing 50 year olds from chatting and stalking 10 year olds.
  And I say parents should actually BE parents and know what their childern are doing.
  What kind of unfit parent doesn't know what their child is up to?
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Rickler, 19 Jul 2006 @ 9:10am

Right..., so myspace is going to charge 50 cents for an account when it already makes more then 50 cents a month from ads per account. At the same time risking 99.999% of all users moving somewhere else that is free.

All so it can make parents do there job. Right....
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- WirelessGuy, 19 Jul 2006 @ 9:20am
  
  Re:
  Rickler, you use the word right in the wrong way.
  
  I am just trying to find a way for a company who obviously cares only about profits from those click adds to create a method that will prevent people from getting hurt.
  
  Oh right, you live in a bubble and only care about yourself, right...forgot, sorry.
  
  If you don't like the idea, come up with a better one. Or are you one of those people who can only point out the weakness of an idea and can never come up with anything original? Right????
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  - TriZz, 19 Jul 2006 @ 9:26am
    
    Re: Re:
    ...if parents aren't paying attention to what their children, they certainly will NOT start because their child is costing them $.50 a month to be on a website.
    
    To think so would be stupid.
    
    The amount of people that are on myspace - and the amount of time that they spend there, the parents are PROBABLY aware that their child has an account...
    
    There's a difference between being aware and being involved. $.50/month is NOT that difference.
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  - jsnbase, 19 Jul 2006 @ 9:31am
    
    Re: Re:
    He did offer a better plan: have parents pay attention to what their kids are doing. I'm about through with having everything wrapped in legislative plastic and regulatory foam to make sure that not a single child sees a sharp edge.
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Erstazi, 19 Jul 2006 @ 9:11am

Agreeing With WirelessGuy
They definately need to change their business model. The cost of bandwidth and upgrades is not inexpensive. Their site is already known to lag during "rush hour." Adding a credit card to verify age, identity, and bring in some revenue. Even if they only required 5 cent/month (and say they lose some of those 94,654,383 users [which a mere liberal estimation could be down to 40,000,000 users]), they could gross $2,000,000 a month. This would severly help with upgrading their servers and help with identity and age issues.
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- IMATEK, 19 Jul 2006 @ 9:36am
  
  Re: Agreeing With WirelessGuy
  Is it just my problem with math or is 40,000,000 at .50 per month actually 20 mil per month????? But that is still a ridiculously smaill amount of money in the scheme of things.
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  - Erstazi, 19 Jul 2006 @ 9:43am
    
    Re: Re: Agreeing With WirelessGuy
    2 Million, not 20 Million. 40,000,000 X .05 = 2,000,000. That could decrease their site's issues of lag and a few other things.
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    - Astral, 19 Jul 2006 @ 10:21am
      
      Re: Re: Re: Agreeing With WirelessGuy
      Just wanted to fix the math
      
      40,000,000 * .5 = 20,000,000
      
      Honestly MySpace is so slow and full of advertising crap that I never go there....despite everyone and their mom telling me to join.
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      - Erstazi, 19 Jul 2006 @ 11:26am
        
        Re: Re: Re: Re: Agreeing With WirelessGuy
        Actually, I thought I typed 5 cents... which means .05 or 5% of a dollar. WirelessGuy said 50 cents which would be .5........ I agree with the Premium idea. The main point is, money has to be generated somehow. And as for kids being on there... Parents should put their arm around them and control what they do. I utilize host files and firewalls to protect my kids from sites I believe are inappropriate. Yes, myspace is free... but in life, not everything is free. Myspace also uses User Input (everything that a user would input on their "space") for marketing... One would think that would be noted as revenue... who knows.
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Anonymous Coward, 19 Jul 2006 @ 9:15am

Another solution for Wireless Guy
Why not just keep the 10 year old girl locked in the house without Internet access, and only allow her out into places where 50 year old men might be present when she can be properly protected by a trusted adult.

Better make it a full-time job for that trusted adult since said 10 year old will surely be demanding to get out of the house more by the time she is 13.

Better make it long term too. There are 50 year old men out there who may be apt to stalk 20 year old young ladies and 30 year old women too!

Point is you cannot completely protect anyone from the ills of society. All you can do is lock up the criminals. Furtunately, said criminals must first be charged, tried, and convicted. Unfortunately, that means there is little you can do before someone has become their victim - on the Internet, as in real life.
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- WirelessGuy, 19 Jul 2006 @ 9:28am
  
  Re: Another solution for Wireless Guy
  I agree somewhat AC, I have seen where people who were isolated as children freak out when they see the real world. And I know I am not trying to protect 20-30 year olds. I am just trying to protect children, even if their parents are not.
  
  I just think that if they state they have process and policies of preventing things like this, they should attempt to try and a way to enforce them. You could even just have the CC on file and never charge it.
  
  I am just trying to get a way to better track people's age and then if someone does do something then they should have some way of know who that person really is. The web should not be a tool for the criminal, make it just that much harder to get this type of information and if you can prevent one child from having to go through the horrors of this, then it did its job.
  
  I know you won't get rid of all of it, just do something real and not lip service.
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Re:, 19 Jul 2006 @ 9:16am

Wirelessguy
I think what he's saying is that myspace would charge the money to get ahold of who's using their services. it isn't for "profit" although they will bank it.

but as rickler said....about99.99999% of users would just move elsewhere
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BlackWidow, 19 Jul 2006 @ 9:20am

Pay for use
I think a low cost pay for use idea is a good one...the cc requirment would help with the arguments about kids haveing accounts...though there is some risk of fraud issues arising....but also they could allow the use of things like visa gift cards and pre-paid cards..so the "teens" would still be able to have access.

....of course implementing all the security features and such cost more $$$ so the overhead starts to go up already!
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FH, 19 Jul 2006 @ 9:38am

and by the way
CC companys usually charge .39 cents per transaction and a small %. So much for any profit.
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- Erstazi, 19 Jul 2006 @ 9:46am
  
  Re: and by the way
  I agree, but this was just an example. Clearly, they do need a change their model. Their ads must be a very low-click-per-cost.
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NoBadDays, 19 Jul 2006 @ 9:38am

Missing the point?
I think the revenue loss they are referring to is the advertisers. At first glance it seems like a great place to advertise because of all the traffic on the site, but at a second glance...they say that users are staying on the site and not clicking on the banners, therefore, they are not buying anything therefore the advertisers are spending TONS on marketing with no return. Second, as mentioned above, since most of the users are not even 18, they don't have credit cards, so why would they click on an ad to buy something? SO, really the only revenue myspace can make is from selling advertising space and if these companies start to realize that there is crappy profit from all they dish out, they'll stop paying myspace to place their ads...make sense?
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- Shannon, 19 Jul 2006 @ 10:58am
  
  Re: Missing the point?
  I'm with you...most of the people on MySpace (or, rather, the most active ones) aren't 18. They have no money of their own to spend...
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Erstazi, 19 Jul 2006 @ 9:39am

Off Subject
Personally, things seem to have gotten off the wrong subject. If so, here is the article again for you to read. Clearly, its about cash, money, dollars, the dough. Maybe I am blind or I have selective reading (similiar to selective hearing) BUT I did not see a piece about kids. I think a legitimate reason for myspace to bring in some dough would be a small fee a month for identity. Ebay does this with great success, I am sure myspace could also.
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jsnbase, 19 Jul 2006 @ 9:52am

You want to see off-topic?
These aren't my shoes!!!

MySpace seems like the perfect place to start really exploring micropayment systems. Little charges to put a particular hot single on your page, for example, or for a band to post a bulletin to an entire region, separate from whatever 'friend network' they're in.
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ForkBoySpam, 19 Jul 2006 @ 10:08am

MySpace N00B
OK - I am by no means a MySpace guru, in fact I have only stumbled there a few times to check out the hot ten year olds...er....I mean bands, but couldn't they do something like Yahoo, or Freewebs does with their websites? Offer a simple, basic plan for free, then start offering "Premium" services for a small monthly or annual fee. I am not some huge innovator or anything, but it seems a plausible solution.
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- ForkBoySpam, 19 Jul 2006 @ 10:09am
  
  Re: MySpace N00B
  PS: To those that are easily angered/aroused/offended, that ten year old commentt was a joke (all be it in bad taste).
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viperdesignz, 19 Jul 2006 @ 10:08am

if you charge one cent every ten years, the amount of users you will lose is enormous. People HATE to spend money online, especially when they can get the same thing for free with out having to mess with their credit card (if they even have one).
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Mike, 19 Jul 2006 @ 10:11am

Poor navigation system - High page impressions
The myspace navigation system really sucks. If they improved that, their page impressions would go way down, but their CTR would go way up. Who is going to click on an ad on a page that is just an intermediary page between where they are and where they are trying to go.
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DeathToMyspace, 19 Jul 2006 @ 10:21am

Talk about death to a business...
If myspace required a credit card it would be the death of the site. Its main draw is that it's a free social networking site. Who is actually going to PAY for a social networking website when THE ENTIRE INTERNET IS ONE GIANT SOCIAL NETWORK. You'd have to be retarded... besides, there are plenty of people who don't have a credit card that are of legal age and most college students use other "social networking" sites even if they also use myspace, which would mean they'd drop myspace as soon as it started charging anything. Plus, I'd be willing to wager that most of myspace's users are underage. You also have to consider, when estimating how many people they'd lose that a lot of people have multiple accounts... so there aren't as many individual users as they say. Granted, I despise myspace and would like to see it go, so I'm all for myspace charging for its service... we'd be rid of the worst internet fad ever
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Tyson, 19 Jul 2006 @ 10:26am

Interesting Question
I want to pose an interesting question... How many people ACTUALLY click on advertisements on websites? Do people honestly believe if you play the little games on the Flash banners that you will win that "free gas for a year", iPod, X-Box, or whatever? I very rarely come accross any ads that I would be tempted to click on and so I am just curious as to how many people will click on ads while browsing.
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- Zorro, 19 Jul 2006 @ 12:43pm
  
  Re: Interesting Question
  I've never clicked on one ad on any internet site ever in my life. Ad-block FTW.
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Ryan, 19 Jul 2006 @ 10:34am

two points
1.) the way to fix myspace is easy. Don't let anybody over 18 initiate a friend request with anybody under 18.

Make the 14 year old seek out the 40 year old if she wants to meet him.. Then, if she does, let darwinism take it's course.

2.) I propose we make a new law. We ban computers from anybody under 18, and we also ban computer, pencil, pens, and paper from all politicians over 50.
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- Final Solution, 19 Jul 2006 @ 10:49am
  
  Re: two points
  Ryan's got a good point about not letting people over 18 initiating a friend request with someone under 18. I think that would work, however I'm not sure myspace, as of yet, can insure the proper age on one's profile. I do know of a few who claim to be 99 years old.
  As for the politicians over 50 being banned from computer, pencil, pens, and paper, I don't know if that's really effective. We could however treat them as we would the sex offender in accordance with my previously stated plan and simple execute all politicians over 50, I think we would all be much better off. Anyone ever see Logan's Run...
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A Final Solution, 19 Jul 2006 @ 10:35am

Hey WirelessGuy, why not focus on dealing with the criminal and not the innocents? Instead of playing watchdog to teens on the net or not allowing them on myspace (which would hurt advertising since kids ask parents for music & cellphones advertised there) how about making a mandatory death sentence for all pedophiles and sex offenders. Fear is a powerful motivator, just ask the church, you sin you go to hell and burn...oh wait, I guess that doesn't count for priests, hehehe. Isn't it time we try preventing the disease not just treating the symptoms?

As for profit and loss regarding My Space, I think you need to keep in mind that more ads for companies under the Fox/Rupert Murdock flag could go a long way to balance the site's cost. I don't know if he's got his bloody claws in the music industry, but at the moment myspace is possibly the best form of advertising the record companies could ask for, I've found dozens of groups I never would've otherwise through it.

And I certainly would NEVER have signed up for myspace in the the first place if they charged money for it, and the day they start charging is the day I'm gone.
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jsnbase, 19 Jul 2006 @ 10:38am

THE ENTIRE INTERNET IS ONE GIANT SOCIAL NETWORK
Sure, but the Sun is one giant fire and yet I can't seem to roast marshmallows in it. Just because you don't like it doesn't mean there isn't money to be made.
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- DeathToMyspace, 19 Jul 2006 @ 11:16am
  
  Re: THE ENTIRE INTERNET IS ONE GIANT SOCIAL NETWOR
  of course you could roast marshmellows with the sun, you'd just have to get close enough with a really long marshmellow stick... c'mon now... use your head ;)
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Anonymous Coward, 19 Jul 2006 @ 10:44am

There are about 70 million members on MySpace. In any population that large you have to expect a certain amount of crime.
This absolutely moronic attitude that the Internet has to be ABSOLUTELY safe for children is idiotic.
Your kid is alot more likely to be malosted by one of your freinds or relatives in your own home than by some stranger on the internet.
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Anonymous Coward, 19 Jul 2006 @ 10:52am

Myspace?
What is myspace? I thought it was the little room under the stairs...
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DeathToMyspace, 19 Jul 2006 @ 11:17am

sorry... marshmAllow
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Chris, 19 Jul 2006 @ 11:18am

Forgetting something?
I think alot of the people who are defending kids' "right" to use MySpace are ignoring an inconvenient little fact. As I understand it, the MySpace ToS says that you have to be 18 or older to use their service. These kids are essentially committing fraud.

And before anyone claims I'm too far off topic, the fact that half their users are middle/highschool students with no steady income or the credit card needed for online purchases surely has some effect on ad revenue.
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JonnyGoth, 19 Jul 2006 @ 11:21am

The genius of myspace debates
One thing I think everyone is looking over, the majority of myspace users are teens and early twenties. To start requiring a credit card would change the entire dynamics of myspace atmosphere altogether.

It would turn into a more adult playground overnight. Other sites trying close to the same thing have gone through this same problem. The exact same result happens everytime they start asking for a credit card. Suddenly, nobody wants the site anyome and only the lonely 38 year olds on up stick with the site.

But myspace already has a standard of being a hangout for the young, very little adults pay serious attention to the site, specially the way the young do. They are religious about it, most of them visit the site 6 -10 times a day. Adults maybe once or twice if that, some every couple of days.

It should not be myspace's fualt that some girl lied about her age, talked to an older guy, and went out and met him, then got abused by him. She lied in the first place, went and met him by her own submission, and left herself open to be victumised. That doesnt make it myspace's fualt.

If anything, the people they need to be charging, are the bands, record stores, and other companies that are on their profitting from the site. That is how they can turn their revinue around easily. Even if it is a small amount, bands love the attention and following they get from the site, they will pay a few bucks for it.

If myspace was a bit smarter they would also offer a more premium profile package. Something that offered no ads, and a few other abilities to the profiles for a few bucks a month and keep the free profiles. This will encourage the current users to upgrade, but if they dont they still have the ability to keep potential ad gain from free users.

Maybe myspace can do something like require a driver license number or state id number since that is more practical for people of their most common age range to have then a credit card. Anyone who doesnt have one is stuck having a private profile and wont be considered over the age of 18 or 17 until they enter one in. Not sure if that is possible to get states to allow that, also alot of hassle to get all the states to talk together.

Either way, I have worked for alot of large companies and help build alot of sites like this type of social community sort. They all have the same fate. Its just not the solution.
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DeathToMyspace, 19 Jul 2006 @ 11:21am

Re: Forgetting something?
Did you actually read their tos? it's 14 years of age...
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jsnbase, 19 Jul 2006 @ 11:29am

I forgot about the giant marshmallow stick.....
You guys are seriously underestimating the levels of disposable income and credit card access among teens. American teens, at any rate.
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C-Tone, 19 Jul 2006 @ 11:58am

possible new approaches
1. Focus on advertisers who value "branding" efforts (bombardment of message to broad audience, less concerned with click performance)

2. Use profile information to offer "targeted" ads (only show advertiser A to females, etc). This should increase perceived value of impressions and improve click-based performance for advertisers that have a bead on their target markets.

3. Don't charge for basic services - do charge for "Extras" (monthly fee for premier band and organization profiles)

4. Invest in public service and education for parents about the realities of the online world for youths today, and how to approach and educate them.
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WirelessGuy, 19 Jul 2006 @ 12:25pm

They already have it
They have in their TOS where people are suppose to be 14. They also have items to prevent someone from chatting outside their age, i.e. 40 year olds are not suppose to have 16 year old friends.

Look I like the discussion I started, but it wasn't about the money. It was a way to determine the age of people using the system. Since most 14 year olds (who can use the site) do not have CCs, they couldn't get the adult content.

And honestly, who cares if they go out of business? If they are in any way shape or form allowing freaks to take advantage of loop holes, then they shouldn't exist.

I for one know my kids internet usage. I have an 18 year old and 13 year old, both girls and both with MySpace accounts. We talk to them constantly and have them report to us any odd activity they might see. I have faith in my kids because I talk to them and listen. Am I the model dad, I am sure I could do better. What I am just trying to do is to protect the child of the idiot parent. I am a bit old fashioned I guess in that I think as an adult my job is to help protect ANY CHILD and not just my own. I was even quoted in the last MySpace dialog on Techdirt in the NYTimes for my comments about all of us focusing on protecting the child over the perverted rights of some freak who should be behind bars.

If you think that is bad, or I am a bad person for trying to help suggest and open dialog on protecting this planets children, then just leave my planet. Christ people, is it really more about profits than it is about the ability for our children to be protected????????

Maybe it is the 20 somethings that don't have kids who wants this crap, but just wait until your daughter gets some freak to email a pic of their wanker and see how you start to feel.
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Anonymous Coward, 19 Jul 2006 @ 12:34pm

I would just like to state that I have registered for porn sites with visa giftcards.

If I was a minor I would be laughing at CC requirements, even a $0.50 charge.
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jsnbase, 19 Jul 2006 @ 12:35pm

Right...(that's what we call a 'callback')
Nobody said anything about putting profits over the safety of children, but if you didn't like that strawman, you're gonna hate this:

I'm glad you are a responsible parent, but I don't feel the need to filter and cripple every piece of literature, film, music or internet information I may someday feel like playing with just because you have kids. Here, I'll make you a promise: I won't shoot or run over or in any way, physically or otherwise, hurt or threaten your children.

But that's all you get. I'm not censoring my world for you, or for them.
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- WirelessGuy, 19 Jul 2006 @ 2:29pm
  
  Re: Right...(that's what we call a 'callback')
  I don't want censorship, what I want is a company to be held responsible for their own rules and efforts for accountability. No where in what I said was I asking for content to be filtered for adults to protect the children. All I was stating was there should be some method of age verification to access a site where you can be chatting with or sharing data with your neighborhood crack dealer or pedophile.
  
  Your comment seems to take the liberal stance to the arguement before figuring out that the arguement had nothing to do with rights. Oh, and btw, until a certain age, legally your rights are limited.
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jsnbase, 19 Jul 2006 @ 3:29pm

The 'liberal' stance?
Nice.

"All I was stating was there should be some method of age verification to access a site where you can be chatting with or sharing data with your neighborhood crack dealer or pedophile."

OK. You're wrong. Let me start naming places where this could happen, and you can tell me which ones should require age verification: A public park. A public pool. The mall. The library. The grocery store. A bus.

See? The problem isn't MySpace, the problem is that people don't want to take responsibility for their own children. It is absolutely an issue of rights - and access. I shouldn't have to spend more - or even put up with red tape - because you're afraid of the bad men.

Still sound 'liberal', or would you like to put some thought in your next response?
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jsnbase, 19 Jul 2006 @ 3:35pm

Although I have to say....
I love that concern for individual rights is now 'the liberal stance.' Or did you just say that because you still think that word is an insult?
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Search Engine WEB, 19 Jul 2006 @ 3:46pm

Online Courses
Here is an idea - for money making - for sites with long visitors

offering Online Courses in partnerships with Colleges or Adult Continuing Education Business type courses - Or Online Tech Training Courses in partnership with the popular software titles

Even offering an advanced Web Conference or VOIP solution for Businesses - by creating a Business Division for Networking Relationships

But there is DEFINITELY something they could do !!!
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The Truth, 6 Sep 2006 @ 8:40am

Very good point Alternatives.

It is common knowlege that girls as young as 14 years old are meeting 20 somethings from Myspace and having casual sex. People are getting laid through Myspace interaction at an alarming rate.

There recently was a reported case of a 12 year old female myspace user who had formed a sexual relationship with a 29 year old male.

It's all a bit creepy if you ask me.
Heck, I've gotten laid through Myspace(legal girls might I add) it's just that these younger users appear to be easy for monsters to prey on.
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DAY, 22 Jan 2008 @ 9:29am

STICK TO THE TOPIC
I wanted to read about myspace profit.... not kids on myspace, u cant control that...myspace is no different than any other public place in the world when it pertains to this child preditors and pedophile are determined to catch there mark, its not up to myspace to prevent this. Disclaimers are enough.
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Stanley Mathis, 22 May 2010 @ 12:47am

MySpace Busted For Stealing Shopkeepers Profits
Sadly, we must inform you, that, Stanley Mathis is having some serious problems with the way "MySpace Staff" are changing and redirecting his "Main Website's URLS" to different "CLONED" pages that we suspect is helping Rupert Murdoch rip him off. You can click on the link provided to investigate the convicting evidence. Are you a copyright attorney? Contact Stanley via his email address to represent, sue, and split the winnings 50/50.
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