Fox Interactive Media announced this morning that it has acquired the thrillingly named Strategic Data Corporation (Google cache of site). SDC offers ad optimization technology that it claims helps clients “typically see network-wide revenue increases of 50-150%.” Fox Interactive spans a large number of sites from AmericanIdol.com to AskMen.com but is dominated by MySpace. Thus today’s acquisition can be understood primarily as an attempt to leverage some high level algorithms to crank up MySpace monetization. SDC will optimize graphic ads and compliment Google’s search ads on MySpace.
Rupert Murdoch said two weeks ago that the site is bringing in close to $25 million in ad revenue each month. Murdoch says that in five years roughly ten percent of Newscorp’s earnings should come from its online properties. In order to best serve ads to an increasingly age and geographically diverse userbase like that of MySpace, the acquisition makes sense. A person can only click on the same dating service and punch the Flash monkey ads so many times; SDC’s technology could help make MySpace more appealing for more diverse advertisers. For a related example of a large content network taking control of an outside ad optimization service, see our coverage of the Yahoo! deal with RightMedia in October.
If MySpace is populated primarily by young people who treat it like email (probably not the best place to advertise) and old people who are there to try and sell things to young people themselves - then there may not be much hope for drastic improvements in ad revenue.
The SDC acquisition is the first major deal made since Peter Levinsohn took the helm of Fox Interactive Media after replacing his cousin Ross Levinsohn, the man who led the deal to acquire MySpace in the first place.
So far so good, Newscorp in the Internet era!
I think it on the right way
—————-
http://www.MillionReturn.Com — Return $1m from 1 page! How?
Interesting move…
What puzzles me is, how these companies are able to find small companies like this.
I mean, sure in this case they could have went on a hunt for the leader in such technologies, but I hear about companies acquiring companies that create new categories and so there is really no specific criteria to [search] with.
Somebody please explain to me how these discoveries are made.
SDC is actually a well known company in the LA area. They’ve been around for a long time providing traffic optimization for a number of websites and ad-serving companies. I’m sure they have a long relationship with MySpace/Intermix. Small group, originally from Andersen School of Business (UCLA). It’ll be interesting to see how Fox applies their optimization technologies.
Huser: that’s what a good corporate development person is paid (very well) to do.
Nice post Marshall, this will prove to be big. FOX is going to run with this one all the way to the bank.
Huser - There are many emerging technology business publications out there you can subscribe to. Industry events and high level networking, of course, have always been big. Most startups that are acquired have been in the works for years, sometimes under a different name.
Smart acquisition by News Corp. And Huser, SDC has been around for awhile.
They can optimize their ads all they want, MySpace is still the ugliest corner of the Internet. It’s like bad web design just puked up all over it. yeeuch.
25 million a month???! crazy
MySpace is ugly, but it also is very personality oriented for the user experience. That was the main selling point, and it worked. I do however agree that it needs a nice make over - as far as infrastructure goes. It hasn’t been as buggy lately, but you still have issues when there ten’s of millions on at once.
But hey — we’d all like to have a site that popular!
Rex
i’m surprised there was something useful to acquire, usually its not a good sign when a company website features clipart people staring into a monitor with a vaccuous sense of accomplishment. they’re only missing the classic - the handshaker clipart.
this deal has been on the drawing board at FIM since mid-06. can’t imagine what took them so long to do it. good deal, by the looks of it.
I think no ad is good optimised today, people don’t click on ads, either they are irrelvant or they are uninteresting or wrongly served, or maybe content of bloggers is good, Any Ways, Its an excitement to earn 1 cent a day. I think google placed CPM ads in my site seeing my honesty and popularity on the Web 2.0 http://WWW.
Seriously I think some thing is wrong with the Ad model, maybe a payment gateway should be built into Blogs so that those who find blog useful can make direct payment to the blogger.
http://www.tekno-world.blogspot.com
I’d have to disagree that if MySpace is structured sort of like email for youngsters and a selling base for older people, that this will fail to monetize well. If the ads were more diverse, I think they would do much better.
Even if I want to sell something, I still oftentimes read at least some of the ads. But I’m married and not interested in a dating site, so I always ignore MySpace ads.