MySpace has missed its financial targets, showing that social networking is struggling to earn its keep – even as part of Rupert Murdoch’s globe-spanning media empire.
News Corp said yesterday that the site will fall short of its annual revenue target of $1bn by 10 per cent. Third quarter revenues actually fell to $210m from $233m in the preceding three months.
About a third of MySpace revenues come from a guaranteed three year deal with Google, signed in 2006. The search giant has already started complaining that it’s not seeing a decent return on its end of the tie-up, however.
What News Corp has in MySpace is an endless supply of page impressions. Despite the magical life-affirming properties of social networking, the laws of supply and demand still apply, and so those pages are worth little more to advertisers than the web’s bottomless midden of spam blogs.