Fox Interactive confirmed Friday that it has reshuffled its management and ad operations--a sign that problems monetizing Myspace persist.
"The new unit's charter will be to optimize monetization across FIM's content network and for third-party publishers leveraging both the company's industry-leading HyperTargeting technology and ad-serving platform."
That's a long-winded way to say that monetization at MySpace, which represents the bulk of Fox Interactive, could be better. Michael Barrett, FIM's chief revenue officer, has been reorganized out of a job. According to multiple reports, Fox Interactive will miss its revenue target of $1 billion for the fiscal year ending June 30. News Corp. chief Rupert Murdoch floated the $1 billion revenue target in August. Here's what Murdoch said on News Corp.'s fourth quarter conference call:
Today, Fox Interactive Media reported its first full year of profitability. It may not seem surprising, given MySpace's meteoric rise in that period, but 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. Overall, FIM in fiscal '07 generated revenues of $550 million and a profit of $10 million, even after absorbing $80 million in retention and amortization costs. We would be surprised if FIM revenues this fiscal year do not exceed $1 billion with margins well above 20%.
Surprise! Nothing like a CEO's reach goal to knock you out of a job. What has changed since then? Google noted that social media is hard to monetize. News Corp. fired back. But later News Corp. revamps Fox Interactive. It's not hard to figure out. Google 1, Murdoch's guesstimates 0.
Bain, previously the executive vice president of technology, will continue to report to Peter Levinsohn, president of Fox Interactive Media, and will be based out of FIM's Santa Monica offices.
PaidContent's Rafat Ali has posted the full memo from Levinsohn and there's little doubt that MySpace and FIM need better monetization. What's unknown is what FIM's internal revenue target was. Murdoch blurted the $1 billion mark, but internal estimates may have been lower. But a miss is still a miss.