Ask The Online Gurus: Can MySpace Make Money?

We’ve got the top thought-shapers in the industry blogging right here at ReveNews. So I said to myself, why not ask them questions about today’s hot topics and get some real answers from the pros themselves? Brilliant!

Introducing the first ReveNews Ask The Online Guru feature. More to come.

Today’s Question is…

Can MySpace Make Money? If so, how? If not, why?

Here are some responses from our online revenue gurus. Feel free to add yours in the comments.

Jeff Doak said…

It can certainly be profitable — the service grows in popularity every day, it already contains millions of user profiles, and these users willingly give up tons of not only demographic information about themselves, but consistently visit the site and add new content to their blogs and profiles every week, all of which can be used to better profile each user. I can’t imagine any advertiser who couldn’t easily list a dozen different ways to market to those users in a highly targeted way. There’s even easy opportunities to allow the users to do the advertising for you and let the users take a rev share. It’s a goldmine.

Peter Figuerdo said…

Yes, because they have the eyeballs…and anyone with half a brain can monetize eyeballs….can they be profitable is a whole other story. How can they make money?

Myspace needs to start charging for premium features of their site. Basic accounts are free but extra filestorage, email, no ads displayed, etc cost more. They also need to build in more of a social networking function. Perhaps even add in an ecommerce engine and power it in exchange for a % of the revenue it generates. But they must remember what got them to their positon…ease of use and cool factor. They cannot get too “commercial or mainstream” or risk losing their user base. They built their biz on 2nd and 3rd tier models and artists who attracted fans and admirers…they should provide tools necessary to grow with those models and artists as they move from 2nd tier to 1st tier and professional space…but they should always be on the lookout for a new crop of users.

Brook Schaaf said…

According to my sources, MySpace makes about 7 million dollars a day in advertising revenue. It’s the perfect model - user provided content. If they can keep the site going at this pace for a couple years, then yes, they’ll make a lot of money.Of course, in a sense, the founders already did make a lot of money in the sale to NewsCorp - $580 million according to the article below.

Consider that the MySpace founder sued because the site was bought “on the cheap.” Consider that the Facebook people learned from this and are trying to hold out for a couple billion.

Leed Dodd said…

I really don’t see MySpace making money until Mr. Murdoch decides to sell. I feel like the current monetization plan isn’t headed in the right direction and that simply raising prices on your existing offers won’t cut it. A site like MySpace has tremendous appeal to the advertiser, but requires some uniqueness and flexibility on the part of the marketing minds within MySpace. Time will tell, but I see Murdoch selling within 2-3 years at a price point of $1 billion.

Dave Cole said…

Myspace is not only a powerful web presence, but it is the next big pop culture brand. Myspace is the MTV for the internet generation, but with more interaction and involvement than with a music tv channel that doesn’t even play music anymore. Here’s where I see myspace’s next obvious evolution: shopping portal. Users will have the ability to rate and review the best clothes, music, dvd’s, video games, etc, and purchase them from a Myspace shopping mall. Myspace is effectively the ‘virtual’ mall for adolescents anyways, why not actually let them shop there?

Jeff Molander said…

There is obsessive focus on this single “news story.” Why isn’t anyone talking about the $150 million that has been set aside to provide legal protection for former Intermix Board of Directors and the sweatheart deal they walked away with? That’s equally senseational and almost as moot as this purge. We can spin all kinds of information 180 degrees to the positive.

Example: MySpace Classifieds had 401K unique visitors in September 05, while Yahoo Classifieds had 573K. MySpace Classifieds didn’t exist a year ago and Yahoo is rapidly losing traffic. Usage of online classifieds is growing faster than other areas of Internet use, as demonstrated by the Pew Project’s data. Overall, social networking companies will be able to monetize it just by being the default — just as Yahoo does. MySpace doesn’t need search, they have users. Ever notice the top of the page at MySpace? The search button is larger than the MySpace.com text!

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