Social Networking Sites Still Struggling With The Whole Monetization Thing

from the underpants-gnomes dept

The history of social-networking sites has largely been dominated by two trends: first, no matter how popular a site seems to be at any given moment, it's probably living on borrowed time. Second, no matter how much traffic a site pulls in, it's going to have a really hard time monetizing it. While the likes of Facebook and MySpace have resisted the former thus far, the latter remains a big problem -- as it has been for some time. Given this history, it's hardly surprising to see an NYT story this week about how little success marketers are having on sites like Facebook. They're finding that banner ads get ignored (again, unsurprising), while their efforts to do "social advertising" aren't bearing much fruit. The article mentions the Facebook page for Procter & Gamble's 2x Ultra Tide laundry detergent, which has attracted 471 fans, and 9 responses thus far to the question "Your Favorite Place to Get Stained?" It's hard to imagine what the P&G marketers expected, but it really doesn't seem surprising that people wouldn't flock to affiliate themselves with some laundry detergent. While some brands do attract that kind of attention, overall, the evidence says that people don't necessarily have a lot of interest in using social-networking sites to interact with brands, while many social-media efforts by companies aren't trusted and are seen as little more than shilling.

This is a big problem for social-networking sites as they continue to struggle to justify their massive valuations with real revenues. Part of the problem seems to be the marketers' mindset and how they see social networking or blogging as some magic sauce that will instantly boost sales and gloss over bad products. The challenge facing Facebook and its ilk is twofold. The sites need to better develop their marketing offerings beyond ineffective banner ads, but do so in a way that doesn't annoy users and trample their privacy, as they'll end up doing more to damage their advertisers' brands than boost them. But the bigger challenge is changing marketers' mindsets and getting them to understand how best to interact with users online. While the sites might see their role solely as selling advertising space, they must be the ones to take a leadership role and help educate and enlighten marketers, if only to help ensure their own survival.

Filed Under: ads, monetization, social networks
Companies: facebook, myspace

Lori Drew Not Guilty Of Felonies, But Guilty Of Misdemeanors

from the twisty-laws dept

In the landmark cyberbullying case, Lori Drew was found not guilty of three felonies, but guilty of three misdemeanors. The jury is deadlocked on the fourth count of felony conspiracy. The three counts of "accessing a computer without authorization" relate to the creation of a fictitious account on MySpace that was used to engage in an online relationship with Megan Meier. This verdict is not surprising considering the emotionally charged nature of this case. Prosecutors were desperate to convict Lori Drew of something, despite the fact that she may not have technically done anything illegal. If what Lori Drew did was truly criminal, then laws need to be passed to make it that way. To twist around computer fraud laws to simply get a conviction not only sets a dangerous precedent, but it is not the appropriate way to serve justice.

Filed Under: computer fraud, lori drew, megan meier
Companies: myspace

Guns N' Roses Loves Online Music, On Its Own Terms

from the release-it-already dept

It will be great when Guns N' Roses' Chinese Democracy album comes out -- if only because it'll end 14 years of speculation and hype, and maybe we'll stop hearing about it for a while. It's scheduled for release on Sunday (and will be available only at a single chain of stores, thanks to an exclusive agreement), but the band is already streaming the record on its MySpace page. This comes after the band got the FBI to investigate a blogger who posted some songs from the album online a few months ago; the blogger was eventually arrested, and recently plead guilty in a plea bargain. So, like so many people in the music business, it appears that GNR love the power of online music as a promotional tool, as long as it's on their own terms. Having the guy who posted the songs prosecuted did nothing to stem the tide of illegal downloads of GNR songs, while his actions helped to promote the band and their work. Furthermore, what's the real difference between streaming the songs on MySpace, and having them freely available elsewhere online? Those who are so inclined can still find a way to convert the streams into downloaded files, while the streams could just point some users to download the album via BitTorrent, where it's readily available.

Filed Under: copyright, guns n' roses, music, promotion
Companies: myspace

MySpace And MTV Catch Up To YouTube On Ad Spamming Uploaded Videos

from the this-is-revolutionary? dept

For quite some time, YouTube has allowed copyright holders to "claim" videos that contain their content. Rather than demanding a takedown, these claims allow Google to place ads on the videos and share some of the revenue with the copyright holder. That seems a lot better than random takedowns, and in fact Google's program has been very successful. So it should come as no surprise that others, including MySpace and MTV are about to offer the same deal. What's unclear, though, is why some are claiming that this is revolutionary. Seeing as YouTube has been doing it for a year, it's difficult to see how there's much to get excited about here.

Filed Under: ads, copyright, uploads, videos
Companies: mtv, myspace

Woman Sues MySpace For Taking Down Her Page

from the mental-anguish dept

It's no surprise that some people get attached to their various social networking profiles, but would you sue if the social network took down your profile? That's exactly what one woman is doing, as seen in a lawsuit filed last week and brought to our attention by Eric Goldman. The complaint lays out the details, but a quick summary is that the woman was shocked (shocked!) to find out that some of the celebrity profiles on MySpace are not, in fact, run by the actual celebrities. So she set up a profile that would "verify" celebrities, and allow those verified celebrities to place her logo on their MySpace page. She claims that one of the fake celebrities complained to MySpace and they took down her profile.

Now, you might think that since its MySpace's site, they can take down whatever profile they want -- but not according to this woman, who mentions the "mental anguish" caused by this over and over again. While it may be a bogus reason for MySpace to have taken down her page, it's not clear what legal grounds she has to stand on. There are some other complaints in the filing, including the fact that MySpace allowed fake celebrities to sign up (and the lawsuit demands that MySpace be forced to take these fake profiles down) and that she had asked MySpace (via a cold call) to support her efforts -- and then was offended when MySpace "stole" her idea and had created their own "celebrities" site (of course providing no evidence that the idea was "stolen"). She also complains that she tried to take her complaint to the arbitration firm listed in MySpace's terms of service only to discover that the firm no longer did work for MySpace, so she claims that MySpace committed unfair business practices by including the arbitration clause in its terms without living up to it.

The best line in the filing may be after MySpace took down the woman's second attempt at this "celebrity verifying" profile:

"At this point Plaintiff was literally seething with anger to the point that she was now consumed by it."

It's not clear what's illegal about making someone angry, but these days, you never know... Anyway, the full legal complaint is below (click through for those reading this via RSS):

Filed Under: lawsuit, mental anguish, myspace profile
Companies: myspace

Slate: Dump MySpace Music, Bring Back Muxtape

from the i-second-that... dept

As we had suspected, the early reviews of MySpace Music make it sound like a dud. It sounds, not surprisingly, like the focus was on appeasing the big record labels, rather than actually making a service that's fun and easy to use. Farhad Manjoo, over at Slate, makes the argument clear, contrasting MySpace Music to Muxtape, the small indie site that the RIAA shut down when it couldn't own a big chunk of it. As Manjoo notes, Muxtape was fun, it worked well, and people liked it. MySpace Music, on the other hand, is just not that compelling. He notes that it doesn't offer anything other sites haven't offered for a while, and on top of it, makes the whole interface cluttered and confusing, while limiting what you can actually do. Once again, we see the RIAA shut down a useful service and put up a dreadful competitor.

Filed Under: music, online services
Companies: muxtape, myspace, myspace music

Independent Record Labels Missing From MySpace Music

from the forgetting-who-brought-you dept

The success of MySpace was helped along quite a bit by independent and non-major-label musicians using the site as a distribution mechanism and way to reach out to and connect with fans. So that's why we were surprised, earlier this week, about reports claiming that the new MySpace Music subsidiary was blocking out some indie labels and focusing mainly on just the major labels (most of whom own a piece of MySpace Music). After posting that message, we received a frantic phone call from someone at MySpace, angrily insisting that the story wasn't true. Our response to that, as always, is that they are free to correct any misconceptions in the comments, and if there were factual errors, we would correct them in the post. Unfortunately, no one at MySpace took us up on that offer.

Yet, now the Financial Times is also reporting that a number of well known bands and independent record labels are complaining about being locked out of MySpace Music -- including the Arctic Monkeys, a band who has been considered one of the poster children for using MySpace to become big. It looks like MySpace has become infatuated with the big labels, and the folks who made MySpace the success it is are being left out in the cold. MySpace, undoubtedly, will claim that it offered the independent labels fair terms which they rejected, but when the site itself is owned in part by the major record labels, it's not hard to understand why the indies might feel that they're not getting a very fair deal.

Filed Under: independent labels, myspace music
Companies: myspace, myspace music

Is MySpace Music For Big Record Labels Only?

from the that-would-be-a-mistake... dept

We've already questioned the strategy for MySpace Music, and now even more concerns are popping up, as various independent labels claim they're being blocked out of the offering altogether. While it's true that most of the focus for MySpace Music has been with the majors, MySpace's success in the music world came out of its usefulness for independent or unsigned acts, who used the site to build up a community. To ignore that side of the market, or even to treat indies as second-class citizens in the endeavor seems like a huge mistake.

Filed Under: big labels, independent labels, music, record labels, social networks
Companies: myspace

MySpace's Music Offering: Ignoring The Elephant In The Room

from the good-luck dept

MySpace has been prepping its own music offering for quite some time, and Fortune reveals the basic details. They're somewhat... underwhelming. It's basically a scaled up version of that UK startup we wrote about last week, where we noted that you don't beat piracy by being more annoying. Basically, MySpace will let people post streamable music on their sites, and will then sell ads against the music, as well as link to sites like iTunes and Amazon for people who want to actually buy the tracks.

There's nothing wrong with the idea. But, it's unlikely to make much of a difference in the market. To say, as Fortune does, that this "promises to be the most significant rollout of a digital-music service since Apple's iTunes" is either hyperbole or (more likely) a statement on how awful other music services have been in the interim. Yet, it also ignores the elephant in the room (as does the MySpace store) which is that it only focuses on one reason why people download unauthorized music: the free part. Yes, MySpace music will be free. But will it also match the other reasons why people like file sharing systems? The convenience? The fact that it's unencumbered with annoying ads or DRM? The aspect of sharing and helping to promote other artists?

MySpace's offering will have some of that, but there's no downloading. People will be able to create playlists and share them, but that doesn't seem all that different than, say, iMeem. As if to prove that no one involved in this project wants to mention the elephant of file sharing, check out this quote from Luke Wood, executive VP of Universal's Interscope Geffen A&M record label:

"This is how people discover music now. It's not happening through people reading Rolling Stone. It's not happening through the radio. It's happening through social networks online."

Is it really that difficult for folks in the industry to at least admit that many, many people discover new music through file sharing? They don't have to say that it's okay or that it's legal. But if they're going to come up with something that really competes, they should at least be willing to admit what's really happening in the marketplace. This is not to knock MySpace and the labels for trying something different. It's great that they're trying -- but pretending that file sharing doesn't exist isn't how you respond to the market threat. Without being willing to even mention the elephant, it's hard to believe that the response is going to be able to compete with the elephant.

Filed Under: advertising, file sharing, free, music, social networks
Companies: myspace

Principal Loses Lawsuit Against Students Over Fake MySpace Profile

from the taking-the-pal-out-of-principal dept

You may remember a story we had last year about a principal at a school so overreacting to some students creating a fake MySpace profile for him that he took them to court. It's one thing to ask MySpace to take down such a profile or to discipline the students in school (both of which would likely backfire as well), but to take them to court seems extreme. And, apparently, the courts think so too. An appeals court has upheld a lower court ruling that there was no defamation or intentional infliction of emotional distress in the case. Of course, the judge does also scold the kids for their "unacceptable" conduct. Luckily for the kids, "unacceptable" wasn't against the law in this case.

Filed Under: defamation, myspace profile, principal, students
Companies: myspace