MySpace users are less affluent than Facebook users. And now there’s even more bad news for the once dominant social networking site: it may not be turning a profit.
According to one source who spoke with Silicon Alley Insider’s Henry Blodget, MySpace brought in approximately $500 million to $600 million in revenue last year… and it didn’t make a profit. To put this in perspective, back in 2007, it was reported that the “Fox Interactive unit, which largely consists of MySpace, turned a profit of $10 million on revenue of $550 million for the fiscal year ending June 30.”
MySpace was acquired by Rupert Murdoch’s mighty News Corporation (Stock Quote: NWS) in 2005, for the princely sum of $580 million. Has that investment paid off?
Blodget speculates that MySpace might be worth 1 to 2 times its revenue, which would value it at $500 million to $1.2 billion—so it’s hard to say.
It also really depends on who out there would be willing to pay top dollar for a property that appears to be losing its cultural value fast. When was the last time a person asked you to check out their MySpace page?
If Murdoch or MySpace’s new management team are reading, here’s an idea from someone who used to be addicted to social networking: make MySpace the simple and safe alternative to an ever-more-complex Facebook.
Strip down MySpace. Make it the place for people who want to connect, without getting sent pokes, gift goats, or “Your friend said something about you—would you like to read what she wrote?” come ons.
I say make MySpace the Google of social networking: easy to use, fast and strictly utilitarian. But they probably won’t listen: A visit to MySpace.com earlier this morning yielded an annoying, auto-loading video for Where The Wild Things Are above the fold.
Probably the most wild thing on MySpace at the moment.