22 thoughts on “MySpace's Revenue Problems”

  1. @Om,

    While the reported revenue and operating income of MySpace may be flat and declining, its’ return on investment will ultimately be measured against the price News Corporation paid a few years back. Not that the acquisition price supercedes YoY or QoQ reporting, it does NOT to be clear. However, when comparing MySpace to FaceBook, the latter has a $500+ million investment hurdle against which to deliver a return. Hence the FaceBook story is much, much worse.

    My $.02.



  2. So what they are basically saying is.
    Making money from people who just want to hang out is harder to do then making money from people who show intent to buy.
    While one needs to create intent in hard economic times, it’s well hard. I think without a shared business model (share intent and creating of intent revenue) these companies will struggle for a long time. If I would invest in start-ups I would look if they can identify intent and use it in their business model.

  3. @Curtis

    Just so I understand, you are saying because Facebook has raised close to $516 million, it has a higher mountain to climb versus MySpace which was acquired for pretty much the same amount of money. Good point, but I also have to say that since we don’t know what will be “return on investment” for Facebook, anywhere from $0 to $15B, it is hard to really compare that metric.

    I would argue that MySpace and Facebook are two distinct beasts and they are chasing entirely different markets. Maybe it is time to write that post.

  4. It is stunningly clear that social networking sites are not effective for advertisers, particularly if they’re looking at it from a CTR perspective. MySpace, Facebook and others should be investing in new tracking mechanisms that (hopefully) show the improvement in brand equity by advertising on these platforms.

    The following link is part of a test to determine if no follow equals no impact.
    flaming lapis garden

  5. @Om,

    Your understanding is correct, though I don’t necessarily agree that MySpace and FaceBook cannot be compared at this point. FaceBook was rumored to have an offer of $1 billion or so sometime back, which is likely the best measurement of FaceBook’s value versus the absurd Microsoft investment setting its’ value. If that $1 billion acquisition happens, then we’re doing an apples to apples comparison of FaceBook versus MySpace.

    I’m interested in your arguments that MySpace and FaceBook are chasing different markets.

  6. @AJ Networking sites need not be ineffective per se for advertisers. The problem imho is that they restrict themselves to much to web 1.0 formats – these banners we have seen in mid 90ies already. Ironically, networking sites like facebook and myspace have themselves not relied on these traditional form of online marketing, to acquire users. They have employed much more targeted means, and networking sites to day need to offer equally targeted format to their advertising clients.

    In addition, I believe that networking sites need a strong virtual goods pillar as part of a comprehensive business model. Facebook already does a lot in that direction, although these virtual gifts are very primitive forms of virtual goods and can only be the beginning. Habbo hotel does better, and something similar would work for MySpace too.

  7. the crisis big more then enough for the online industry to face the reality,most of them who lies advertising inthere back bond platform,I think it is “just find”for my space to lose some profit,cause everyone has faced the same,I hope they dont just over sad about it,my space still a place that I am sure will be a fortune to a couple months a head more after soon this crisis ball over,I meand “If the crisis ball over”for now,just stay survive I think its already “great”

  8. let’s be serious, myspace has huge problems- they’re driving away their hardcore users. a lot of people have told me that they only use facebook now and have erased their myspace profiles. even worse, myspace has done such a poor job improving their services that a lot of older users are still completely unaware as to what apps are or that you can update your status instead of your profile name. much of the website still has that half-assed implemented feel that it always has had. the calendar application is horrible and doesn’t integrate with anything off the website. you can no longer put images in your bulletins or profiles unless you use css (because it violates the tos.) don’t get me started about the invasive ads that are starting to appear on the music player… myspace has more problems than flat growth.

  9. I am having problems with my email on myspace and also you can’t search people on myspace. Is this a technical prblem that is being fixed? Thanks,Machelle

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.