Report: Facebook Ad Revenue To Surpass MySpace Next Year

A new report released from eMarketer today, states that Facebook “will surpass its former rival, MySpace, in ad revenues in 2010, when marketers worldwide will spend $605 million on Facebook versus $385 million on MySpace”. It’s not a surprising shift considering Facebook’s traffic has been dominating MySpace for over a year now. It appears that advertisers are finally catching up though.

eMarketer’s projections may sound extremely conservative considering that Facebook is expected to generate well over $500 million in revenue this year alone. So what accounts for the $65 million gap in revenue, given that advertising makes up the majority of Facebook’s revenue? The only other significant revenue streams on Facebook would be virtual gifts as well as any testing of Facebook’s new Credits program.

While I think eMarketer’s projections are significantly lower than Facebook’s actual advertising revenues, it highlights Facebook’s ongoing growth. Facebook Pages are increasingly becoming an integral component of brand advertising and that will only increase as Facebook introduces the Open Graph API, enabling branded social experiences to take place anywhere on the web.

eMarketer expects total social network ad spend to grow 7.1 percent next year, up to $1.3 billion, of which Facebook will make up the largest percentage. In other words, there’s a bright future ahead for social networks, as long your company is called Facebook:

Back in September, we saw that 20% of all online advertising was on social networks, with MySpace slightly leading Facebook (9.2% to 8.2%). I suppose we can expect the social share of online advertising to continue to grow – but not MySpace’s.

With Facebook doubling in size this year, it’s not surprising that revenue continues to grow at a rapid pace. It will be interesting to watch Facebook’s growth trends over the coming year both on from the revenue and user perspective.

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