MySpace Earnings Disappoint

Yesterday, News Corp. reported their earnings for Fox Interactive Media group which is mostly represented by MySpace. Earnings dropped around 10 percent quarter over quarter. Alley Insider has paraphrased News Corp. COO Peter Chernin on the earnings call: We remain incredibly optimistic about social media. But there are specific challenges 1) Tons of inventory. Lack of scarcity creates a liquidity challenge. Working on bringing big brands aboard. 2) People who are visiting social networks there for different reasons, different uses. Figuring out how to target. 3) What's the value of a "friend"? Trying to figure out new metrics to communicate with marketers. The first issue that is brought up is something that Naval Ravikant expressed on last week's podcast: there is nearly unlimited inventory. This is creating a serious problem which is resulting in the continued decrease in CPMs. While AppsSavvy, a New York based social network advertising company has seen average CPMs between $8 and $12, most developers have not been seeing anywhere near this. Excess inventory and varied traffic is making it extremely difficult for these sites to monetize. Whoever comes up with an effective scalable model for social network monetization will have a fortune. There were some highlights from FIM's report: 54 percent percent of all social network ad revenue is going to MySpace Revenues were up 24 percent year over year Times spent on MySpace video continues to increase "MySpace is at an all time high in terms of audience reach and engagement according to both comScore and Neilsen -- more than doubling FacebookÃ¢â‚¬â„¢s U.S. audience with 73 million users compared to FacebookÃ¢â‚¬â„¢s 36 million." So while MySpace did not produce the most impressive quarter, the site continues to grow even despite Facebook's continued growth.

Social Pro Daily

MySpace Earnings Disappoint

Nick O'Neill

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Nick O'Neill