Murdoch: MySpace worries 'misplaced'; Calls Facebook a phonebook

News Corp. CEO Rupert Murdoch spent a good bit of time defending MySpace's honor in the wake of the buzz machine that is Facebook.

To hear the blogosphere tell it Facebook has all but eclipsed MySpace. The traffic stats beg to differ, but when it comes to growth Facebook is closing fast. But News Corp.'s earnings conference call had an interesting subtext: Don't worry about MySpace.

For MySpace, which is still gets an "other" line in the vast News Corp. empire, the amount of chatter about the social site is notable. To wit: News Corp. said Fox Interactive Media (essentially MySpace) posted first quarter revenue of $188 million, up 80 percent from a year ago, with operating income of $4 million. Impressive until you realize it's a rounding error. News Corp. reported operating income of $1.05 billion in the first quarter with revenue of $7.1 billion, up 19 percent from a year ago. Net income was $732 million.

Here's what Murdoch had to say with the subtext:

When I was in Silicon Valley, I went to a conference a couple of weeks ago, the excitement that you could feel surrounding MySpace was infectious. It’s become so much more than a social network. It connects people, but it’s evolved into a place where people are living their lives, a social platform packed with search, video, music, telephony, games. And having the chance to spend time talking with the innovators and leaders of the tech world made it even more clear to me there are no limits to continuing that extension, to building, expanding, and monetizing MySpace and our dozens of other smaller sites.

Subtext: MySpace is still relevant. It also bugs Murdoch that Silicon Valley is Facebook happy.

Just last week, MySpace joined forces with Google to launch Open Social (blog focus), an open platform for social application development, a move that underscores our commitment to fostering innovation in an increasingly social web. Essentially, Open Social will create a de facto standard for social networking, enabling developers to write a widget to a single standard and gain immediate distribution to 200 million homes.

Subtext: Look Facebook is proprietary and we're going to squash it. We have Facebook surrounded.

We just announced a new initiative this week; Self-Serve by MySpace, the first ever ad platform to offer customized tools for small businesses to create and target display ads to their desired customers in a social media environment.

There are 23 million small businesses in the United States and less than 1 million advertise online. With Self-Serve, we hope to bring that new class of advertisers to MySpace.

Subtext: Why didn't our ad platform get as much coverage as Facebook's did?

There’s been a lot of chatter lately about MySpace’s ability to maintain its leadership position in the evolving world of social networking and it’s ability to truly monetize it’s vast audience. I am more convinced than ever that any fear is misplaced. Just look at the numbers. Nearly one in every four Americans is on MySpace. We are the most trafficked site in the United States. Last month, we delivered over 45 billion page views, which represented nearly 10% of all page views on the Internet. Three-hundred thousand new users around the world join MySpace every single day and we grew our unique users during September, up slightly from August, and up nearly 23% from the same time a year ago.

With more than four years under its belt, MySpace is seeing a stable and steady growth curve consistent with any market leader.

Subtext: I'm getting really tired of the MySpace bashing. Sure our growth is slowing. That's the law of large numbers.

Obviously MySpace’s most talked about competitor is Facebook. While it has grown rapidly over the past several months, it is still only 45% of MySpace in terms of the unique users and about 33% in terms of page view. Every MySpace unique user spends over three hours monthly on the site. Competitors are not cannibalizing our audience. For instance, according to Nielsen Online, in the U.S. 74% of Facebook’s users are also active on MySpace.

Most importantly, the two platforms are very different in the user experience. MySpace is a place for self-expression, where users’ MySpace pages become their home on the Internet. It is where they discover people, content, and culture -- where they share information, communicate, and consume. Facebook, on the other hand, tends to be a web utility, similar to a phonebook.

Subtext: Take that Facebook, you're a phonebook. Yeah I said it!

Postscript: Obviously Facebookers and Murdoch aren't on the same page. Facebookers think they are going to conquer the world. Guess they didn't get the memo that they are a phone book. Talk about a disconnect.