BUSINESS BLOGS
BUSINESS BLOGS
category: business
08 May 2008

The following is from SAI, about Fox Interactive Media’s revenues:

- Branded revenue is up 21% over last year and branded sell-through is trending up for the year with a 19% increase from Q1 to Q3.

- Performance revenues were up 24% year over year.

- Most importantly, as MySpace user base continues to grow, we’re actually earning more money per user. FY 08 revenue [display + search] per unique is up 49% over last year.

- 54% of all social network ad dollars are going to MySpace (eMarketer, 12/07)

- Hundreds of HyperTargeting campaigns have been run in last eight months – with 20% or more of all orders today including HyperTargeting.

- Seeing double CPMs for HyperTargeting vs. non-Hyper-Targeted

- Orders with HyperTargeting are about 60% larger

- Enjoying considerable number of repeat orders with about 75% of advertisers ordering HyperTargeting again.

- Also, seeing successes in sales of key pages with sought-after branded advertisers and attracting many high-profile brands for the first time this quarter, including Novartis, Wrigley, Virgin Mobile, Unilever and Toyota. Several have stepped up to the popular branded “skin” of the MySpace home page which goes for a 70% premium on the standard homepage buy.

- Major category growth including Automotive, up 73%, Consumer Electronics, up more than 300%, Beverage, up 600% and Education up 850% year over year.

- MySpace is at an all time high in terms of audience reach and engagement according to both comScore and Neilsen – more than doubling Facebook’s U.S. audience with 73 million users compared to Facebook’s 36 million.

- And minutes spent on MySpace in the U.S. far surpass Facebook – 242 vs. 167 minutes per user per month.

- MySpace TV continues to grow and is the number two online video site after YouTube.

- IGN and Photobucket are up 40% year to year in unique visitors worldwide. IGN remains the number one games information property and in the past quarter, its Direct2Drive service surpassed one million games sold. Photobucket’s worldwide page views for March 2008 were 2 billion – up 85% year on year

- FoxSports.com is up over 20% in worldwide unique visitors year on year and recently launched its mobile WAP site expanding its reach further – the Number one mobile WAP site for mobile sports information.

Right about now, I should mention that I was employed by IGN after they bought my old company. That last a few months until they pushed me out. Also, my new company, WatchMojo.com, partners with both MySpace TV and YouTube and provides these with a steady supply of video content.

That being said:

We know that MySpace’s annual revenues will come in at about $900M for fiscal 2007. That’s lower than the $1B that Rupert Murdoch threw out some time ago, but it remains a very promising figure.

SAI is right to point out that:

Even while MySpace and all of the other FIM sites continued to grow, FIM revenues dropped from $233 million in Q2 to $210 million in Q3; about a third of that total came from a 3-year guaranteed deal from Google.

But all that means is that MySpace remains an untapped goldmine, a work-in-progress. Admittedly, no one wants to see declining revenues and I am a bit surprised about that. All right, a lot surprised. Then again, I am a sales guy at heart and I always see media properties as “glass is half full” scenarios with more inventory as an asset and there always being more advertisers to engage.

I am not very bullish on social networking revenue, but I am very bullish on video advertising.

News Corp. itself admits, social networking has some 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.

I believe MySpace TV needs to position itself as more of a media property and less of a social network. Why?

The numbers speak for themselves:

Let’s compare, first the figures for Worldwide Social Networking Advertising Revenue:

Compared to US Online Video Advertising Revenues:

This all comes from my earlier post: Hype Watch: Social networking revenues.

Regardless, MySpace’s stats show two things:

1 - In the social networking segment: right now, MySpace is crushing Facebook when measured by revenues.

2 - In the video segment: while Google CEO Eric Schmidt says that he does not yet know how to monetize YouTube, Rupert Murdoch guns for $1B revenue target…

I will say it: when it comes to media and advertising, technology firms are largely out of their element. Apart from Google who is the most successful ad-supported technology company, any company that strives to be an ad-supported entity needs to adopt a media-centric approach and folks, MySpace is doing that…

COO Peter Chernin might be spinning the facts, but in the context of “how long did it take for YHOO or GOOG to hit $1B” he is not wrong. However, I would add, GOOG and YHOO really had no clue with regards to advertising, I do think that using News Corp.’s world class sales force, MySpace should and could be doing a lot better. Maybe in a better economic backdrop and with more contribution from IGN, this would be a reality.