MySpace Turns A Profit, Barely

from the not-even-in-the-tweens-of-millions dept

Thu, Aug 9th 2007 1:47pm — Joseph Weisenthal

Ever since News Corp. bought out MySpace, there have been lingering doubts about the social networking site's profitability. The deal that the company signed with Google did put some of these doubts to rest, as it seemed likely that News Corp. would comfortably recoup its initial outlay. But the fundamental issue of whether a popular social networking site is necessarily a cash cow remains up in the air. Yesterday, News Corp. announced that in this past fiscal year, the company's interactive division (which is mainly MySpace) turned a profit of $10 million on revenue of $550 million. These are incredibly paltry margins. This division is still growing rapidly, so it's understandable that it would be putting a lot of money towards new investments. However, the figures include money from the Google deal, which should drop right down to profits. In other words, while the company may be crowing that the unit is now profitable, it's far from showing that things are truly successful.

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Filed Under: social networking
Companies: myspace, news corp

10 Comments

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Cynical Sceptic (profile), 9 Aug 2007 @ 2:07pm

My Space great idea, bad business.
The idea is very successful, but as a business no one every thought out the plan to make money from it. Ad revenue only generates enough income to handle the cost of doing business, if that.
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Witty Nickname, 9 Aug 2007 @ 2:16pm

Targeted advertising
I have said it before, and I will say it again. MySpace knows almost as much about me as Google does. I am a married homeowner in Texas with a dog and a child on the way.

When I log into Gmail I am offered free issues of parenting magazines, discount heartworm pills and occasionally an add for a new drill bit or something.

When I log into MySpace they show me an 6 ads for a dating site, and a "punch the monkey get a free iPod" scam.

Which site do you think gets more ad traffic from me?
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M, 9 Aug 2007 @ 2:57pm

Re: Targeted advertising
Depending on how long you have been married, I'd go with the dating sites. :)
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josh, 9 Aug 2007 @ 3:01pm

Thats the problem with free things
when im on myspace it would never occur to me to pull out money for anything. i cant imagine ads really work for a site primarily composed of kids too young to have credit cards. we're all there just to talk to each other, not to shop, not to check out book reviews, we dont really use most of the features that myspace is implementing at high costs. if they focused on the core of its purpose, specifically, kids talking to each other, they could just sell ad space to stupid anti drug things which we would ignore but everyone would think it was a good thing.
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Anonymous Coward, 9 Aug 2007 @ 3:14pm

Re: Targeted advertising
Considering gmail works with ad words, and all your e-mails probably talk about your family, it's no surpise that you get advertisements more tailored to you. As opposed to myspace where most of the people who actualy use the site are under the age of 25, are more concerned about pop-culture, and necking up the local hotties at your local coed social outting.
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Anonymous Coward, 9 Aug 2007 @ 5:06pm

And Facebook thinks their valuation is WHAT?
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Anonymous Coward, 9 Aug 2007 @ 5:44pm

Re: Targeted advertising
i luld
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Anarchy_Creator, 10 Aug 2007 @ 3:42am

Two Words...
AdBlock Plus!
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Lucretious, 10 Aug 2007 @ 11:40am

People are still using MySpace?
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Vanilla Gorilla, 13 Aug 2007 @ 12:57am

Re:
Depends on whether you classify emos as people.
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