MySpace's Latest Plan To Make Money: More Of The Same Stuff That Hasn't Been Doing Much

from the how-do-i-add-profit-as-a-friend? dept

Mon, Apr 2nd 2007 11:44am — Carlo Longino

Despite crazy talk of how much MySpace is worth, the fact remains that it really isn't much of a money-spinner, as it's been unable to turn its heavy traffic into decent ad revenues. Last year, it earned just $90 million in advertising sales -- hardly impressive for a site that's supposed to be one of the most popular on the web. One Wall Street analyst predicts MySpace will make $271 million this year from ad sales (which is an odd estimate, given that Google is supposed to pay a minimum of $300 million per year for ads on the site), and while that's some healthy growth, it's still a hardly overwhelming figure, particularly as the site's traffic growth is slowing and its user base is aging. But never fear, says BusinessWeek, which lays out MySpace's plans for profits: adding video content and targeting ads to raise CPMs, selling profile pages to advertisers, letting users sell things from their profiles, and trying to enlist its users to help in viral marketing campaigns. Sound familiar? It should, since it's the same sort of things MySpace has been trying for a while, but apparently without a lot of success. The MySpace story at News Corp. is following a similar pattern to that of Skype at eBay: following high-dollar acquisitions, corporate buyers struggle to turn popularity and huge traffic into significant profits.

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13 Comments

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Witty Nickname, 2 Apr 2007 @ 1:04pm

MySpace Ads
I am a member of myspace. My profile states that I am married, and I am looking for friends, not dates. My MySpace page is flooded with ads for a DATING SITE.

If Myspace can use the data they have on every one of its members to even a slight degree they could make ALOT more on ads.
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- Slapnuts, 2 Apr 2007 @ 4:21pm
  
  Re: MySpace Ads
  Amen Brother
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Peyote, 2 Apr 2007 @ 1:07pm

great post except...
The Google deal ramps up over time, with '07 being far less than $300 million. MySpace has yet to sell targeted video ads (thus new) and definitely hasn't done anything in peer to peer commerce, like a deal with ebay for instance (thus new). The analogy to ebay/skype is absurd. Recent press reports have MySpace on a runrate of $30 million a month, which will probably be well over $400 milllion this year. They bought all of Intermix, including the 40% of MySpace that Intermix didn't own, for $649 million. So that is about 1.6x forward sales, before even taking into account what all of Intermix's other businesses are doing. Ebay bought Skype for $2.5 billion plus a potential earnout and Skype will do something like $300 million in revenue this year, for a price to forward sales multiple of 8.3x. So remind me again how this is a relevant comparison?
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dan, 2 Apr 2007 @ 1:30pm

Myspace is bad
I don't know why so many people use myspace. It has to be the worst programmatic website in the world. Very convoluted. I believe it is a fad and its popularity will run dry. I would not invest a dime into that company. Most people I know are already saying they spend less and less time on the site.
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- loof, 2 Apr 2007 @ 1:41pm
  
  Re: Myspace is bad
  Myspace is a good idea gone terribly wrong. From what I can tell it is dying (slowly). Most of the people I know are starting to graduate and kill their myspace profiles because they don't want employers looking at them. As the people who made myspace popular get older they'll shift towards other sites and the up and coming generation will (like always) find something new and exciting that isn't myspace.
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DCX2, 2 Apr 2007 @ 2:24pm

Dating ads
My friend is a lesbian, and all her dating ads are for a woman seeking a woman.

I'm a straight guy; all mine are for men seeking women.

So, I guess they the information on the profile, at least a little bit.
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- Anonymous Coward, 2 Apr 2007 @ 9:27pm
  
  Re: Dating ads
  Can I watch your lesbian friend?
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Kyles Mom, 2 Apr 2007 @ 2:28pm

I FOUND MY GIRLS GONE WILD DVD!!!
WOOO HOOO
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B, 2 Apr 2007 @ 5:24pm

You forget that the Google deal was for all Fox Media properties, not just MySpace.
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Anonymous, 2 Apr 2007 @ 6:13pm

Why?
... Why be a myspace hater? myspace has over 900 employees, lets put everyone out of a job. too bad not everyone can come up with a Multi-million dollar Idea.

It's ok, Keep hating & Myspace will keep laughin all the way to the bank... lol.
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- ralpjh, 4 Aug 2008 @ 11:41am
  
  Re: Why?
  LOL good say...my space is part fo the american economy and if it dies. somehow less people working and more employement benefit application and ur tax money will pay for it.....so people dont laugh too fast and criticize myspace..
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Evostick, 3 Apr 2007 @ 4:14am

Music
Myspace is good for music promotion, as it seems all artists have a myspace page. No other myspace type site has such a concentration of artists.
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Anarchy_Creator, 3 Apr 2007 @ 5:03am

God I Love FireFox
Adblock
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