Is MySpace dying, or just transitioning?

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Permalink Reply by Michael R. on October 28, 2009 at 10:30pm

The only reason I ever got on Myspace was to listen to new music put out by artists. So, this sounds like a good thing.

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Permalink Reply by Kyle Lacy on October 29, 2009 at 6:54am

I wouldn't count them out but this is their last battle cry. They have always said, "We do not compete with Facebook." We all know that is a complete load of crap. It is important to note that MySpace and Facebook are officially talking about sharing music content through Facebook Connect.

If you were to ask me the future of Myspace? Nothing other than becoming a subsidiary of Facebook.

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Permalink Reply by Douglas Karr on October 29, 2009 at 7:23pm

I agree with you, Kyle. We shouldn't forget that Myspace has some deep pockets, too.

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Permalink Reply by Pat Coyle on October 29, 2009 at 7:56am

Interesting to note that MySpace out earns Facebook on the advertising front, and will continue to do so for another year or so. In a sense, Facebook may be a blessing to MySpace in that it pushed MySpace to diversify earlier and with more focus. MySpace might not be as big as Facebook, but the game is still very young, and Fox Interactive is a savvy media.

Found an article about social media advertising trends written a couple of months ago: Social Media to Decline in 2009.

Social network advertising will see a very small $35 million drop from last year's $1,17 billion earnings, which represented a 32.9 percent increase from 2007. Things are expected to return to the normal ascending trend next year with an estimated $1.29 billion spent on social media advertising - a 13.2 percent growth.

The main culprit for the drop is MySpace, once the largest social network in the US, which is expected to see a 15 percent drop in revenue to $495 million. Even with the declining revenue, MySpace is still the main earner with 43.4 percent of the market, coming from 49.8 percent last year. Facebook, on the other hand, will see a 9-percent increase in ad revenue, growing to $230 million.

“Facebook, once a distant second to MySpace, has outperformed its rival in nearly every measure of usage - and is on track to surpass MySpace in ad spending by 2011,” Williamson added. Worldwide the numbers follow the US ones with MySpace dropping 14 percent to $520 million, while Facebook, the largest social network in the world, by a comfortable margin, will see a 20 percent increase in ad revenue to $300 million. Sources close to the company are a little more optimistic though, estimating as much as $500 million in revenue this year and billions in the future.

At the end of the day, I see many companies in the digital media space realizing that advertising doesn't work the same way in social as it does in mass media, and therefore they can't count on tapping that vein exclusively. Digital media companies need to create multiple revenue stream, and one of those streams needs to be micro transactions. They need to find a way to get all of the hundreds of millions of users to each spend a little bit, a la iTunes. Keep in mind that broadcast TV and its historically powerful networks is at a distinct disadvantage to cable networks in that cable network operators have the luxury of 2 revenue streams, home subscriptions AND advertising, whereas broadcast has only ads.

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Permalink Reply by ashan jay on October 29, 2009 at 8:20am

Myspace is dying. I personally hate myspace, and looking at other people's myspace pages. Because they all have crap load of random things in their pages, which either freeze your computer or takes longer to load. I dont really understand why people find adding random crap to make their profile look absolutely ridiculous, which would make it load slower and which would stop people from looking at it, still an interesting and popular thing by some. Anyways it doesnt have much future left, thats what I think.

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Permalink Reply by Kyle Lacy on October 29, 2009 at 8:22am

I don't think we can base the future of Myspace off of our personal opinions. They do have more revenue coming in because of ad spending... than (Facebook). Facebook may be outgrowing them in the viral sense but in the world of business... money matters. I still think they need to refocus their efforts on more content than glittery butterfly badges on personal pages.

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Permalink Reply by ashan jay on October 29, 2009 at 8:53am

Hey whats up Kyle lacy, hows your brandswag kicking these days? We need to talk about a business exchange deal once you get a chance. We might need your social marketing expertise for Voxiant www.voxiantsolutions.com

Thanks for reminding my personal opinion dont matter... of course it does man!!! I have heard lot of people saying that, at the same time I know people that connect with others and expand their network and spread the word about events or businesses through myspace only. And these people would be in utter misery if the myspace died.

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Permalink Reply by Mike Seidle on October 29, 2009 at 6:54pm

This reminds me of Yahoo back when Google ate their lunch:

Yahoo is a portal company, not a search company. We're the home page of choice for most internet users.

Sounds a lot like:

We're a media content hub, not a social network. We're the media hub of choice for most internet users.

Couple of Things:
There's a lot of ad inventory on MySpace and it's much more compatible with internet advertising standards. Facebook is trying hard to reinvent internet advertising, and I'm not so sold it's working as it's simply easier to drop a big spend on MySpace.

A MyBook or FaceSpace (or whatever you call it) merger would be interesting, but I'm not sure it would deliver long term value because you would lose the ad inventory over time as people went from checking both their MySpace pages and their FaceBook pages. It's a reverse split as far as ads go and I don't know the price on ads goes up enough to make the difference. @kyle - I'm curious - how does the merger protect that precious ad inventory?

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Permalink Reply by Pat Coyle on October 29, 2009 at 9:37pm

This from TechCrunch today:

Now that the dust is settling on the newly launched Google Music (if you don’t yet have it in your normal Google search results, you can use it here) that integrates LaLa and iLike/MySpace streaming music, all I can think of is this: What were Facebook and Ticketmaster thinking when they passed up the opportunity to acquire iLike?

MySpace is the big lottery winner here. They bought iLike for $20 million in August. What they got: a talented (literally) team that is starting to fill the executive ranks at MySpace, the biggest music application on Facebook, and, it turns out, a deal with Google that is now sending massive traffic flow directly to MySpace Music.

Our understanding from sources is that MySpace made an offer to iLike without knowing about the Google deal. Supposedly, since iLike was under NDA, all they knew was that iLike had a big partnership opportunity with some big company, nothing more. In hindsight the iLike deal looks smart even without Google. Add that in and it looks absolutely brilliant. I’m no fan of MySpace CEO Owen Van Natta, but I’ll give the man credit here.

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