Social Networking



According to eMarketer, News Corp. announced that Fox Interactive Media turned its first annual profit on revenue of $550 million. With an estimated 80% of FIM revenue coming from MySpace, that translates to about $440 million in MySpace revenue for the fiscal year, which ended June 30. Almost all of that comes from advertising through social networking.


By now, there are very few that doubt the value of the MySpace acquisition by News Corp. In fact, there is more controversy as to did CEO Rupert Murdoch "steal the deal". Either way, is looks to be quite the bright spot for News Corps future. According to Murdock, "It wasn't so long ago — 24 months — when many said we were embarking on a fool's errand. In the 12 months prior to our acquiring MySpace, the site generated $23 million in revenue. Today, on the back of its durability and success, we are forecasting that MySpace alone will generate in excess of $800 million in revenue in fiscal '08."

eMarketer has projected that MySpace would generate $525 million in US ad revenue in calendar 2007 and $820 million in 2008. Both of those figures will likely rise when social networking ad spending is forecasted later this year.



US Online Social Network Advertising Spending, by Type of Network, 2007 & 2008 (millions)


MySpace is beta-testing a new targeted advertising tool, a deal with Google to supply search technology and MySpace's international business are said to be bright spots in the future of MySpace.


Although Facebook's revenue may be less that MySpace at roughly $125 million in 2007, with over 31 million active users (up from 8.9 million in September 2006) and over 40 billion page views a month, Facebook has a bright future. People think Mark Zuckerberg was crazy to pass down a rumoured $8 billion to sell Facebook but he obviously sees a future in social networking.


What does the future hold for social networking? Blogs are taking control in the form of organic search engine rankings and will continue to do so in the future. With YouTube, MySpace and Facebook all great means to leverage your reach into the social networking world, businesses are crazy if they have not started a blog and begun experimenting with these avenues. Get a Free Business Blog today.