Posts Tagged ‘myspace’

MySpace is seriously expanding its attention to social games, with Games replacing Apps as a tab in its main navigation bar. On her or his home page a user will now have a “Featured Games” window, where MySpace staff make game recommendations based on the interests of the user and his or her friends. Users will also have easy access to game updates, and will know when their friends score an app of up to five stars.  

According to Inside Facebook (yes, Facebook covered this MySpace game upgrade quite fairly and thoroughly), 28 percent of MySpace’s 100 million monthly visitors use apps, and half of them play games. MySpace also recently announced Neon, its new IPhone app for games.

There’s much more about what MySpace is developing, including a screen shot of the new Games & Apps page, in this Inside Facebook post. Media groups should take note of the importance of games, and the huge audience they bring.

While News Corp. reported operating income of $3.6 billion for Q4 2009, the real news is how hard the media giant was hit by its MySpace downturn. The social media site recently laid off 700 and has replaced a founding executive with Owen Van Natta, the former CRO at rival Facebook. News Corp. acquired MySpace in 2005 for $580 million.

News Corp.’s current year revenues are $30 billion, an eight percent decrease from this time last year, although Cable Network Programming increased its revenue 32 percent. The Television segment of News Corp. suffered a whopping year-over-year income drop of 80 percent, while Newspapers and Information Services reported operating income of $96 million, far less than half that reported in 2008. Advertising revenue declined in all areas – the UK, Australia and Dow Jones in the U.S.  The only two segments which actually reported a loss, howeer, were in Book Publishing by HarperCollins, and the Other category which included Fox Interactive Media and MySpace.

“The past year has been the most difficult in recent history, and our 2009 financial performance clearly reflects the weak environment that we confronted throughout the year,” said Chair and CEO Rupert Murdoch, on the earnings call. “We streamlined all our businesses and continue to do so, at the same time adjusting to the revolutionary changes taking place throughout the media industry.”

News Corp. reported a fourth quarter net loss of $203 million compared with net income of $1.1 billion in Q4 2008.

Here’s AIM Group’s latest coverage of the MySpace struggles.

MySpace continues to drop in its war for supremacy with Facebook. Comscore results for March show that MySpace had 70 million monthly uniques in the U.S. in March. That’s less than it had a year ago. Meanwhile Facebook has surged to 61 million U.S. users and are adding a few million more every month.

Even worse for MySpace, its worldwide monthly page views have declined from 47.4 billion a year ago to 38 billion today. The impact is that advertisers will be less willing to spend the big bucks at MySpace. Over at Facebook, monthly page views grew from 44 to 87 billion vs. a year ago. (The numbers are similar in the U.S. with Facebook growing from 13 to 20 billion page views a month and MySpace dropping to 34.8 billion from 41.6 billion).

TechCrunch predicts that MySpace will be unprofitable within a year, decreasing from $800 million last year to less than half a billion within the next.

TechCrunch also reported that Facebook received and turned down a term sheet for a new $200 million venture round of funding that would value the company at $8 billion. Facebook’s last round valuation was $15 billion. The company is also suggesting that revenues will be $550 million in 2009 vs. previous estimates at $400 million and 2008 revenue of $280 million.

U.S. ad spending on social networks will fall 3 percent in 2009 to $1.14 billion in 2009, from $1.18 billion in 2008. That’s a significant turnaround from previous years. Spending grew an estimated 33 percent in 2008 and 129 percent in 2007.

The reason, says EMarketer which released the results, is due to a drop in spending at MySpace.

EMarketer estimated in its December 2008 forecast that marketers would spend $630 million to advertise on MySpace in 2009. That estimate has now been reduced 15 percent to just 495 million.

News Corp. executives said in a May 6 conference call with financial analysts that ad revenues fell 16 percent at Fox Interactive Media (FIM) in the January–March 2009 quarter, compared with the previous year. MySpace makes up the bulk of FIM’s revenues. (News Corp. does not break out MySpace revenues separately.)

MySpace’s woes are not reflected in estimates for other social networking companies. Ad spend on Facebook is expected to increase 9.5 percent in 2009, to $230 million, while US ad spending on widgets and applications is projected to reach $70 million, up 75 percent from 2008. U.S. spending on all other social network sites combined is expected to rise 1.5 percent to $345 million.

EMarketer has also issued estimates for ad spending on MySpace and Facebook outside the U.S., the first time the research firm has reached beyond the U.S.

Overall, marketers worldwide are expected to spend $520 million to advertise on MySpace in 2009, with $495 million coming from the US and $25 million from other markets. Non-US spending on Facebook is expected to reach $70 million this year, for a total of $300 million in 2009.

Twitter may be growing exponentially but can it sustain itself? Maybe not according to new data from Nielsen. The research company found that more than 60 percent of U.S. Twitter users fail to return the following month. Twitter’s 40 percent retention rate was even worse over the course of the last year (pre-Oprah) where it was less than 30 percent.

Nielsen’s blog post shows a chart that plots retention rate and reach. Their conclusion: a 40 percent retention rate will limit a site’s growth to about a 10 percent reach figure.

Compare that with Facebook and MySpace which, when they were in the ramp up phase, had a retention rate at nearly 70 percent.

While we’re still happily tweeting, we have noticed several prominent Twitters we’ve followed jump ship. The tides do not bode well.

Facebook’s ex-COO Owen Van Natta has been tapped to fill the role of CEO at MySpace, replacing founder Chris DeWolfe who will now be a “strategic advisor.” The latter is from an official Facebook press release. Van Natta’s appointment is still unconfirmed (it was reported by All Things D’s Kara Swisher).

Van Natta’s appointment represents a sense of sweet revenge. He quit Facebook when his ambitions to become CEO there were not realized. Now he’ll be competing head to head with his old social networking employers.

Tom Anderson, MySpace’s president and co-founder, is also moving on within the organization to a role yet to be defined.

Van Natta is currently CEO of music start-up Project Playlist. In the past, there was speculation that MySpace might buy the music startup. Van Natta was also once the leading candidate to head up MySpace Music.

The gap between Facebook and MySpace in the U.S. is narrowing…quickly. According to ComScore, at the end of last year MySpace’s unique visitors in the U.S. were 20 million more than Facebook. As of March, MySpace’s lead has dwindled to just 9.1 million.

ComScore says that Facebook had 61.2 million visitors in March compared with 70.2 million for MySpace. But Facebook is on a growth curve – March saw 3.8 million more visitors, an increase of 6.7 percent over the previous month – while MySpace actually lost 160,000 uniques in March, and an astounding 5.8 million down from January.

At this growth rate, Facebook could overtake MySpace as early as this summer.

It took a day to develop. Does it herald the future of classifieds? Probably not. But Tweebay has an interesting twist on the i-List approach to using social networks to post “micro-classifieds.” TweeBay wants to be the micro-EBay of Twitter.

Here’s how it works: Tweebay lets a seller list an item on its Web site. The item is then posted to Twitter under a user called “Tweebay.” Interested buyers add Tweebay to the list of users they follow. They’ll then receive alerts through Twitter when something new goes on sale. The hope is that buying something from a Twitter friend will feel safer than purchasing from an EBay stranger.

Whether or not Tweebay itself succeeds, it probably will be only the first of similar Twitter-specific plays. An aspiring entrepreneur, for example, could create a Craigslist-Twitter mashup that posted items from Craigslist according to categories where each was a separate Twitter user. You’d only follow the categories you were interested in.

There are still a few kinks to be worked out. Tweebay doesn’t have a way to complete a transaction. Buyers and sellers do that offline. And EBay may not like the name “Tweebay.”

Tweebay was a quick hack that Paul Rawlings, a developer in the U.K., put together on Christmas Day. The more established service iList also allows members to post to Twitter as well Facebook, MySpace and Craigslist (see our write up here). But in i-List’s case, the classifieds appear from the specific user on Twitter. TweeBay’s approach of aggregating listings under a single user ID may be more effective, especially when Twitter launches its long delayed groups feature.

MySpace is encouraging users to show their real name on the site. The social network currently allows users to create any name they want, thus hiding their true identity. Facebook, by contrast, identifies members by their real names.

The anonymity on MySpace worked fine at first for users who preferred living in a more virtual world. But the emerging social Web is all about claiming your true network identity and managing your public reputation. Other services, such as Google, require real names, and with cross-system universal login on its way, a standardized naming system will be required. Facebook Connect is another example.

MySpace’s way of getting real names has been to add a feature in the account settings area that asks users if they want to display their real name on their profile along with whatever display name they’ve chosen. When adding a new friend, MySpace users are also prompted to reveal their real name.

But it’s all still up to the user who can certainly say no. It remains to be seen if MySpace will prevail in its latest endeavor.

Analysts from eMarketer weigh in on how the next year in online marketing, e-commerce, social networking and more will unfold. Here’s a quick overview.

Online ad spending

Analyst David Hallerman predicts online video ad spending will run counter to overall economic developments, and rise by 45 percent in 2009 to reach $850 million. Even though advertisers are increasingly budget conscious, they agree that the best way to woo online audiences to open their shrinking wallets is through “messages that reach their hearts and minds – hence more video.”

Search marketing

Hallerman also says that search marketing spending will grow by 14.9 percent in 2009, to $12.3 billion. He calls search marketing “recession-resistant” as it is highly measurable and advertisers will increasingly look “secure and effective methods to combat fear in an economic meltdown.”

Total ad spend

Finally, Hallerman comments that total U.S. Internet ad spending will increase to $25.7 billion in 2009, an 8.9 percent growth rate. While that will be the lowest year-over-year increase for online advertising ever, it will still be more than nearly all other media.

Demographics: multicultural ads ascend

Lisa E. Phillips says that multicultural marketing will be on the upswing in 2009 with more African-Americans and Hispanics going online. More language and culture specific messages will be required.

Retail e-commerce: big declines

Jeffrey Grau has gloomy news: online retail sales (excluding travel) will grow by only 4 percent in 2009, although he notes that online sales growth was already on a downward slope as the number of online buyers approaches saturation. Most retail e-commerce sales growth in the future will come from increased spending by consumers who have long been online buyers, he says.

E-commerce for social networking

EMarketer’s Debra Aho Williamson believes that e-commerce will be a growing revenue stream for social networking sites. She expects both MySpace and Facebook will enhance their self-serve advertising systems to sell real world goods and services.

But at the same time, she also predicts tough sailing for smaller and niche social networks, many of which may need to shut down or be acquired by larger players. Marketers that have built their own social network platforms will need to migrate them to existing services.

Since Facebook is already a de facto business networking site (because of the number of businesspeople who use it), Williamson says the company will develop ad programs aimed at B2B companies and that will directly affect existing business-focused networks like LinkedIn.

Twitter may have turned down Facebook’s all-stock offering in late 2008, but it will still end up being acquired, Williamson predicts. And the company that buys it will use the Twitter infrastructure to offer targeted marketing and analytics to advertisers.

Traditional media will continue to hurt

Carol Krol weighs in on newspaper advertising which, not surprisingly, will continue to decline in the new year more than any other medium. Industry-wide cutbacks will continue, and there will be more consolidation. “The industry was limping before the recession; expect more newspaper companies to become casualties,” she writes. Also look for more newspapers to reduce their publishing frequency similar to the Christian Science Monitor, The Detroit Free Press and The Detroit News, she adds.

As for TV ad spending, it will decline 4.2 percent to $66.9 billion in 2009. And YouTube will start to carry full-length television programs supported by ads, in keeping with the company’s Q4 2008 announcement. Other online streamers will follow suit.

Facebook is opening a new sales office in Paris with Damien Vincent joining as employee number one. Vincent was previously head of sales at MySpace France. Blake Chandlee is Facebook’s commercial director for EMEA.

Facebook claims to have 6.1 million users in France and to have just reached the one million mark in Switzerland, adding to its 130 million users worldwide. Facebook translated the site into French in April. Competing social network in France, Skyrock, has more than 12 million users.

Facebook U.K. now has a sales and marketing staff of 40, serving eight million Facebook users there.

Consumers love using social networking sites more than ever, but advertising spending has not kept pace. EMarketer has revised its projections for U.S. social network ad spending, down from a projection of $1.4 billion in May to $1.2 billion now. In 2009, spending will be up to $1.3 billion, says EMarketer, but that’s well bellow the previous projection of $1.8 billion.

Care to guess why the lower projections. It’s the economy, of course. But it’s also that new formats for online ad spending like social networks, which can’t always show a proven ROI, will be hit particularly hard.

Some more specifics from the research company:

MySpace will bring in $585 million in U.S. ad spending in 2008, down nearly 23 percent from the previous estimate of $755 million.

The projection for Facebook is down 21 percent to $210 million for the year.

Here’s something from MySpace that we think will be very useful. The company is launching the MySpace Toolbar that will bring a stream of MySpace data, including notifications, friend activity, mood and status for themselves and their friends, right to the top of the browser.

That saves having to switch back and forth between browser windows. It also allows MySpace users to stay logged in all the time. The toolbar will also include a Google search window, but that seems irrelevant, at least for Firefox users where it’s already built into the browser.

The service is available for Internet Explorer and Firefox…but Windows only for now. Authentication and data transfers are accomplished through the MySpace Open Platform.

The toolbar will first be available for users in the United States, United Kingdom, Australia, Canada, New Zealand, India, and Ireland.

Mobile users can now watch videos from MySpace via a partnership with RipCode. The content will be available at MySpace’s mobile site, m.myspace.com. MySpace says the video will work on the iPhone, T-Mobile G1, BlackBerry Bold and BlackBerry Storm devices, among others. All user uploaded videos and most premium content will be available.

RipCode’s is providing an on demand video transcoding service where videos are transcoded only when requested, into whatever combination of codecs, bit rates and resolutions an individual handset requires.

YouTube has offered similar functionality at m.YouTube.com since early this year.

Related: MySpace has published a nifty guide on how to view videos on your mobile: http://vids.myspace.com/index.cfm?fuseaction=vids.individual&videoid=47525015

The vultures are starting to get hungry. MySpace co-founder and CEO Chris DeWolfe, speaking at the Reuters Media Summit, said the online social network sees opportunities in today’s economic slump to buy start-ups for a fraction of what they would have cost six months ago.

Companies that were once worth between $200 million and $300 million have been knocking on MySpace’s door as they run out of money. Web 2.0 startups are now willing to sell themselves for less than one-tenth of their former value, DeWolfe said. He predicted these companies will become even cheaper in the coming months.

Acquisitions are central to MySpace’s growth strategy, DeWolfe explained, especially as the company expands its international presence and moves more into developing mobile applications..

One company MySpace is not interested in: Twitter. It’s a “great service,” DeWolfe said in response to a question, but MySpace provides a similar service and would rather focus on acquisitions related to its core growth areas.