/>
X
Innovation

How much are your friends worth?

News Corp. revealed yesterday that its new media subsidiary Fox Interactive Media (FIM) has missed this year's revenue target of $1bn by 10 per cent. FIM's portfolio is dominated by MySpace, which accounts for the majority of its revenues, bringing into question once again the ability to monetize the huge page views generated by leading social networking sites and User-Generated Content in general.
steve-ohear.jpg
Written by Steve O'Hear on
How much are your friends worth?
News Corp. revealed yesterday that its new media subsidiary Fox Interactive Media (FIM) has missed this year's revenue target of $1bn by 10 per cent. FIM's portfolio is dominated by MySpace which accounts for the majority of its revenue, bringing into question once again the ability to monetize the huge page views generated by leading social networking sites and User-Generated Content in general.

News Corp. chief operating officer Peter Chernin told analysts: "It's still difficult to quantify the economic value of a friend in the social networking space," compared to the tried and tested metrics of old media.

At the same time he is keen to point out that compared to rival Facebook, MySpace users spend more time on the site, displaying a greater level of engagement. If page views alone aren't cutting it with advertisers, Chernin and co. are hoping to promote "engagement" as the new online currency.

Also see: Can AOL solve the UGC and advertising problem?

Presuming that advertisers buy into the notion that users are more engaged on MySpace, then they'll need to know what they are engaged with. That's where MySpace's new "hyper-targeting" ad system comes into play. The technology mines users' interests as revealed on their profiles and site activity, and matches that data to advertisers. On the surface it's easy to be seduced into thinking that this type of system will be as lucrative as Google AdWords. In reality, it's probably far cruder and much less profitable.

As The Register notes:

Many social networking cheerleaders see this type of business as their own AdWords goldmine, while failing to appreciate that a general ongoing interest in "sports" is nowhere near as valuable to marketeers as a Google search on a particular day for "Adidas football boots".

When considering MySpace's Hyper-Targeting in the context of AdWords, it's highly unlikely that lightening will strike twice.

Related: Report: MySpace turning News Corp. stock toxic; advertisers shy of UGC

Editorial standards

Related

How to use your phone to diagnose your car's 'check engine' light
BlueDriver Bluetooth dongle

How to use your phone to diagnose your car's 'check engine' light

Google Play malware: If you've downloaded these malicious apps, delete them immediately
a-man-sitting-in-his-living-room-looking-at-his-smartphone-with-concern

Google Play malware: If you've downloaded these malicious apps, delete them immediately

How to access your iPhone's camera faster with this hidden feature
iphone-13-pro-max-cameras.jpg

How to access your iPhone's camera faster with this hidden feature