Who needs social media? Junk CPMs, inventory glut, 'Sexxy Sangria'

Yahoo CEO Terry Semel latched on for dear Wall Street life to “Social Media” in his Q3 (disappointing) earnings conference call last week. I projected Yahoo’s call to Social Media arms in “Yahoo vs.
Written by Donna Bogatin, Contributor

Yahoo CEO Terry Semel latched on for dear Wall Street life to “Social Media” in his Q3 (disappointing) earnings conference call last week. I projected Yahoo’s call to Social Media arms in “Yahoo vs. Facebook, MySpace, Digg, YouTube”:

The Yahoo – Facebook story of most significance is not if/when/how Yahoo may buy the Facebook social networking site. Yahoo is indeed on a social networking mission, but not exclusively the one that incites passionate debate.

Yahoo is embarking on a concerted campaign to reassert what it believes is its under appreciated leadership position in social networking. I witnessed the campaign in action this morning at the Shop.org ecommerce conference in New York City.

Yahoo literally “interrupted” regularly scheduled conference programming to make a direct pitch to the 2000 plus retail marketers in attendance that Yahoo is the social media vehicle of choice for their brand messages.

Yahoo yodeler-in-chief Semel’s pitch on Yahoo Social Media to Wall Street:

Yahoo has been a pioneer in social media. It is a long-term focus of ours, and we are a far bigger player in this space than many people actually realize. We had the foresight to buy Flickr back in the early part of 2005 and since then, Flickr has grown to some 20 million users per month, with a lot more to come.

Yahoo! Answers, which we developed internally, is alone as a standalone, one of the largest communities and social media on the web. Answers surpassed 60 million unique users -- monthly users -- and 120 million answers worldwide just 10 months after it launched, and is now available in 18 countries and nine languages.

Together, Yahoo! Answers, del.icio.us, Flickr, and Yahoo! Video have a total of almost 100 million users, which makes us the leading force in social media today. Importantly, and boy have I read about this, within this group is the largest community of the prized 15- to 24-year old youth demographic on the web, which stands at Yahoo! at approximately 30 million.

We are incredibly focused on making every part of Yahoo! a more social experience. We are convinced that the social media space will continue to grow and evolve and we plan to be a key player in this business.

Why does Semel want Yahoo to be a “key player” in the social media “business”? Color provided by Daniel Rosensweig, Chief Operating Officer, does not suggest a near-term social media monetization bonanza:

I think what we are referring to is you see a whole proliferation of a lot of inventory in sort of the lower end of the non-premium range. A lot of the social media stuff, a lot of the network stuff that is being created, a lot of the ad networks are able to serve it. That is really focused on the low-end of the people who are not interested in the environments that they are in. They are simply interested in a specific performance ratio…

the inventory glut. It has definitely been a huge change. You can see from the page views of a lot of the social media sites that exist today. That is going to change the market dynamics…

Who specifically is changing the market dynamics? The 100 million plus MySpace friends, including the very friendly Sexxy Sangria, at left!

I asked Ross Levinsohn, President, Fox Interactive Media, about the appeal of Ms. Sangria to blue chip advertisers, at the recent OMMA conference in NYC.

I recount my exchange with Levinsohn in “Fox Interactive to Yahoo: watch out, we are on your digital tail!”:

I asked Levinsohn how user-generated content could be “king” for FIM as his 100 million MySpace friends are only commanding “junk” CPMs. I pointed out that I had written about one particular MySpace friend–Sexxy Sangria–and noted that even Google shows little interested in trying to sell ads against her very friendly profile.

Levinsohn replied that even at low CPMs there is a great value in an aggregated billions of impressions. He also expressed enthusiasm for “immersing” professionally produced content within the viral MySpace experience.

In touting FIM’s MySpace and other Internet properties, Levinsohn referenced Yahoo as the Web traffic leader his company aims to surpass:

How will Levinsohn gain the coveted “number one” Internet company moniker at the expense of Yahoo? Levinsohn repeatedly banged the digital drum this morning that FIM is “not just MySpace.” For Levinsohn, in fact, FIM is already the “number one content network on the Web” thanks to its portfolio of online properties:

myspace.com: social networking
foxsports.com: sports content
ign.com: gaming community
rottentomatoes: movie destination
askmen.com: lifestyle portal..

Levinsohn proudly touted his FIM content network:

Has more than 131 million unique users worldwide;
Reaches more than 50% of all 18-34 year olds;
Had 33 billion page views last month;
Has highest concentration of 18-34 year old males…

Levinsohn regales we are “bigger” than Microsoft, AOL, Google…and Yahoo, here we come!

It is ironic that the president of FIM, owner of social networking leader MySpace, defines his firm’s online social media properties as a close runner-up to Yahoo in an industry keynote presentation, while the Yahoo CEO laments in a conference call with Wall Street that his company is not getting the social media leadership recognition it rightfully deserves!

I recently interviewed Levinsohn (see "FIM Ross Levinsohn on MySpace in "Real Deal" Exclusive Interview") and asked him about the FIM-Yahoo social media showdown:

QUESTION: 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?

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.

FOLLOW-UP: Have you identified a single, major competitor?

LEVINSOHN: We are all competing against each other, but we all are partners too, just like in the traditional media business.

What are the morals of the stories? Friendship and brands are the keys to social media monetization success. READ MORE:

MySpace, Facebook: Brands rule, not users
MySpace vs. Facebook: Is friendship real?

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