The media blitz from News Corp. executives on MySpace is increasing, with two excellent articles on The Hollywood Reporter and Washington Post.
In The Hollywood Reporter, Fox Interactive Media president Ross Levinsohn says that social networking is just a platform for "peer recommendation" services:
"What's next for FIM is leveraging MySpace's online community and communication into a peer recommendations framework for leads on everything and anything: the best children's playgrounds in Los Angeles to the best concert seats in Madison Square Garden to the best steakhouse in Dallas. Such peer recommendations provide a gentle seaway into targeted, fine-tuned behavioral marketing for national and local advertisers wanting to reach MySpace's 15- to 34-year-old core user."
This is apparently going to add to the bottom line, with MySpace's much-maligned inability to monetize set to change:
"The prospects for generating revenue and profits are just as limitless. Murdoch said FIM will post at least $350 million in revenue this year, up from $47 million last year, and at least $500 million in 2007. Some analysts, who expect MySpace revenue to top $1 billion by decade's end, say the site will turn profitable this year with about $13 million, and that could increase to $50 million in profits in 2007."
Advertising is what is going to drive this growth:
"About 80% of MySpace revenue will continue to be generated by advertising, with the remainder coming from subscriptions, fees and transactions."
Since acquiring MySpace nine months ago, its user base and revenue have more than tripled - according to the article. For all that, there's a lot of infrastructure work to be done before Levinsohn's big projections have a chance of coming true (which he acknowledges). And there's still the small matter of MySpace's extremely low average CPM to overcome - by most accounts currently less than 10c per 1000 page views.
For a higher level view of MySpace's future, check out Internet seer Rupert Murdoch's interview on WashingtonPost. He says that "we have to find ways, without destroying its character, of getting more advertising revenue." And therein lies perhaps MySpace's greatest challenge - monetizing their core user base, without driving those same users away to the next big social networking system.
See also my earlier post: News Corp: portals are out, mini-portals in