I have met my fair share of Myspace haters the past few years. Admittingly I have become a hater. I really do despise the overall design and the “trashy” brand name Myspace has developed… I do. Now, just because I hate using the tool doesn’t mean I don’t respect their business prowess.
Mashable recently had a post talking about the new Citiforward Myspace Credit Card, which is a great business tool for Myspace to increase their $600M revenue posting from 2008. Whether or not you agree with the concept of credit cards or offering a social-networking card is not the reason for this post. The simple fact is that Myspace is owning the rest of social networking sites in terms of revenue.
The question still stands: Will Myspace be able to hang on to the business model they have created? Will Facebook actually figure out how to monetize 130M users? Will Twitter ever make money (Good luck)?
I can give the people over at Myspace my respect…because in terms of business…they own the market.
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MySpace is riding a wave that is ebbing. They will see their revenue decline substantially this year. In two years expect them to be barely breathing.
Facebook is being cautious but smart in rolling out ad programs that are much more effective than MySpace ad offerings.
Twitter doesn’t need to worry about revenue right now. They will get everyone on their system, possibly get bought by Google and then Google will start running content targeted ads. Regardless they will have little backlash for running some ads when they need to. As long as they don’t pull an eBay and alienate their core users then they can maintain critical mass and market dominance as a cross platform information super highway. Who can compete with Twitter’s information highway? They would need to really screw up to lose their momentum. They don’t have an real competitors that I can see.
Their ad sales did drop in January and February. I am interested to see how everything plays out with Twitter.
They could make a mistake and alienate their users but at the rate of growth they are enjoying… That might not even hurt them.
Jeb–respectfully disagree. Facebook is “smart”, but their slow rolling out of ad platform is due to the fact that they have very limited areas for advertisers to actually advertise. Unlike MySpace. Say what you will about design/aesthetics (I agree), they have much more room/flexibility for folks to place ads. In addition, their users *expect* MySpace to tell them what is hip/coming next, which makes it easier for brands to partner with them and promote. Facebook is much better as a user “utility”, but don’t discount MySpace’s usefulness as a brand advertising platform (just yet).
My $.02, Alan
Alan, ok, but who are you advertising to on MySpace? Bands, strippers and some stragglers that haven’t jumped ship? Who are you advertising to on Facebook?
High school and college kids, educated folks and generally a much more desirable demographic.
I teach a class at Franklin College and I do a survey of students each semester. No-one is on MySpace and everyone is on Facebook.
I have advertised a good deal on Facebook. It isn’t perfect but it’s a great way to get your brand in front of a million people in your target demo for $2-300.
I believe that Myspace has their advertising niche and I have to back Jeb up on the younger generation not using Myspace.
I recently taught a class at Purdue University and there was 1 student out of 75 that was using Myspace.
Each site has a place in the Internet marketing mix.
As a Baby Boomer, I am not on MySpace because of the “trashy” brand reputation. I am on Facebook. But MySpace does seem to have a business model that has proven to make money, although. I have always heard that “nothing happens, until somebody sells something”. Some of the advertisers must be selling something or they wouldn’t keep spending on MySpace. Having a brand out in front of millions of people is wonderful, but you need a few thousand to buy something to justify the continued advertising.
All social networks should have a business model based upon something getting sold to the end-user not on advertising alone.
Bruce, I totally agree with your last sentence:
“All social networks should have a business model based upon something getting sold to the end-user not on advertising alone.”
So far MySpace has found a way to make some money, makes sense it was build by spammers (literally). So they know how to do that stuff. But in time I think they will lose the audience they are selling to. Just like they had to jump the email ship before MySpace. Soon their ilk will take over Twitter making it nearly unusable. Whee!
The company that can create a platform for many millions of people to have an open but meaningful conversation, without constant spam solicitation, will win the prize which is longevity and revenue ala Google.
Facebook, Twitter and Ning are the only ones in that race from what I can see. MySpace is a setting sun,
Jeb