Thursday, April 05, 2007

MySpace Still Can’t Figure out How to Make Money!

I’ve written about this before but it appears the folks in FIM management haven’t been reading my posts. I saw a great article on Business week today about the trouble MySpace is having growing revenue.

“As numbers go, this one's a whopper. Last year MySpace users called up an average of 31.5 billion unique page views per month. That's as though everyone on the planet visited the site once a week. And yet, the big kahuna of social networking racked up a paltry $90 million in ad sales.”

Now, it wouldn’t be fair to say they are not growing revenue, according to Merrill Lynch & Co. analyst Jessica Reif Cohen “This year, if everything goes according to plan, MySpace could generate ad revenues of some $271 million.” I wonder where they would be without the Google Deal.

Some of their plans seem to be developing nicely “they are also working on an eBay-like service that visitors can use to sell tickets and merchandise from their personal pages. Plus, they're busy signing deals with cell-phone companies like Cingular Wireless (T ) to put MySpace on handsets. The company gets 70% of the $2.99 monthly fee that Cingular charges for its MySpace service.”

In my view there should be one focus for their revenue generating efforts, they should find a way to share revenue with the millions of users that provide the content for the site. Can you imagine millions of very active viral salesman working for you? Look what Squidoo is doing on a much smaller scale; imagine Squidoo’s revenue numbers with MySpace’s traffic.

FIM management needs to stop thinking of generating revenue in the traditional ways and include their users in their success. This will build loyalty for the site and help millions of users worldwide earn some cash. Just my 5 cents (Adjusted for eBay economics)

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