MySpace: Bragging rights vs. revenues
When Ross Levinsohn ran Fox Interactive (FIM), one of his prime objectives was to “overtake” Yahoo, as I put forth in “Fox Interactive to Yahoo: watch out, we are on your digital tail!”:
Levinsohn is not content that the online properties he oversees represent the "second biggest Internet company in the U.S. in terms of page views.” He let it be known that number two really does try harder; FIM intends to overtake Yahoo, sooner rather than later. Levinsohn regales we are “bigger” than Microsoft, AOL, Google…and Yahoo, here we come!
I asked Levinsohn, however, if “bigger,” in terms of page views, is the valid metric for a FIM vs. Yahoo competition, in an interview last October (see “FIM Ross Levinsohn on MySpace in ‘Real Deal’ exclusive interview”):
Q: Rupert Murdoch and yourself look at Yahoo as the number one Internet company to catch. Murdoch recently said, “With continued international expansion, MySpace could well become the biggest global online company as early as this time next year. We are close to Yahoo! in unique visitors in the U.S. already after one year, Let's see how we do around the world." You said at OMMA that FIM is the second biggest Internet company in the U.S. in terms of page views and fast approaching Yahoo. FIM is not fast approaching Yahoo if revenues is the measurement, however. Yahoo is a $6 billion revenue company, while FIM is reporting less than $300 million in revenues. What is the timeframe for catching up with Yahoo’s revenues?
Ross Levinsohn: We are not focused on beating Yahoo at anything. Yahoo has been around for ten or eleven years. We are just getting started, 13 months, it’s been a great first year. Rupert Murdoch and Peter Chernin want us to build the best business possible, we’re not comparing ourselves to the 800 pound gorilla in the room. We are ahead of our strategic plan so far. We are doing terrific for a traditional media company. Yahoo is a great company, but it is not huge in social networking.
Peter Levinsohn leads FIM now, not Ross. Peter has unleashed comScore Media Metrix data aiming to illustrate that FIM is now “bigger” than Yahoo, in terms of page views.
The Yahoo vs. FIM competition in terms of bottom-line revenues, however, has still not been addressed by FIM.
Another question that needs to be addressed is the battle for Web site validation via for-profit Internet data services, as I discuss in “YouTube, MySpace, Digg stats: Web ‘tabloid’ tease?”:
Commercial Internet data shops—comScore, Hitwise —and self-serve Web traffic tracking applications—Alexa, Google Trends—supply the blogosphere with continuous fodder for tabloid style headline stories.
Greg Sterling raises the same issues today, and underscores the stakes:
Murdoch et al. are crowing about this and there will be a lot of public discussion about whether the comScore data are accurate. Indeed, maybe this is an opportunity for “the industry” to really carefully scrunitize the methodology being used to generate these numbers and traffic data online more generally. There are people who are are quite skeptical about MySpace’s claims about its number of users, etc…
I think we do have something of a credibility problem regarding the data in the market, which does need to be addressed in a transparent way. There’s a lot at stake here. If Wall Street believes comScore, Yahoo!’s share price will likely suffer.