Rumors Of The Decline Of MySpace Are Exaggerated

Why does Fox still not publish the profit and loss and revenues for MySpace?

Probably because they are embarassed by them?

Chris
no doubt that MySpace revenues aren’t flash in comparison to the user numver, but having said that I don’t get the figures for The Australian (News Corp owned newspaper) etc, News doesn’t publish unit details at this level. I’m not sure though that they’d be embarrassed by $1b from Google over 3 years though.

I whole heartedly agree that numbers don’t lie, and that therefore we must conclude that MySpace is still going strong.

But, when was the last real improvement done on MySpace? Does the team behind MySpace have any real strategy for the future? They should have, but I don’t see it.

Facebook definitely has, and even though it’s still very unclear whether their strategy is the right one, at least they are trying.

I believe that a service that is sitting still (MySpace) will eventually be beaten by (new) players that try to take the social networking concept to the next level. Just recall what happened to the Web 1.0 search giants just several years ago.

Facebook has really exploded in popularity in the UK in the last month. Heck, it even became a main article and editorial in one of the broadsheet newspapers on monday. Plus, it’s most of the wider, older demographic (say, 20 to 50) who are monied, as opposed to a younger demographic who are less monied and therefore less of a revenue source. The figures by the end of the summer for users and growth may be more telling.

Duncan, did I ever tell you how much I love it when you write posts disagreeing with me in the middle of the night?

Yeah, great, current comscore numer show myspace as flatish, not down. Let’s see how things look in six months. My facebook invites are up 20x over the last month. Something big is happening.

I have heard many times that the 1 billion Google deal is not all that it is hyped up to be, and I believe Michael Arrington had made the same point in an earlier post?

Well, as it is said in the article MySpace and Facebook are not made for the same users.

MySpace is like the bling bling social network. The users come there to have the shinyest page (just have a look at the different slideshows), the highest number of friends and the best popularity.
On the other hand Facebook provide a service more dedicated to pictures’ sharing and keeping contact with close friends.

MySpace may still have a long time to go before it collapses because it provides different types of services :

* Music sharing
* Video sharing (this service is being more and more popular on the website)
* Dating (if you use the browse function you have a free access to a complete dating service).

Therefore I’ll be likely to think that MySpace is going to grow more with the localization of the website and that they might steal people from Youtube with the video sharing service.

MySpace doesn’t worth 12 bilions.

From wikipedia: “My myspace have 182.000.000″ .

If Myspace have 182,000,000 users and if they sold myspace for 12Bilion the value of each user is $65.93 and mysape also need earn $200.000.000 (+/- $1 from each user/month) per month in the next 5 years to pay this investment.

Quogle,
Regards

Facebook will peak.
Just like myspace is.

Different community though. Facebook makes me feel old. Makes me feel like a pretentious ignorant lefty bitch. Myspace makes me feel like an emo tard though… How about something nice and neutral?

Someone who makes a site which works a little like 2-way yahoo pipes kinda thing and lets you mash up profiles all over the place so you can simultaneously maintain profiles on ALL major social networking sites from one URL…

Imagine being able to drag across everything from myspace to facebook to whatevers next easily… And still keep connected to your friends using your previous platform. How neat.

They might have something special on their hands.

I am the same, in my mid 30’s I don’t really get myspace, its too gimmicky, full of content that I cant really view at work and don’t want to see at home.

However as a business model myspace works, their traffic is admirable, their user base phenomenal especially considering the number of with click throughs to paid sites they get.

Different social networking websites fit different age groups and demographics. Bebo the young, myspace teens to twenties, facebook university to mid thirties (although this is moving quickly to older age groups with the risk of making it uncool to their original young user base) and LinkedIn / Ecademy post-university professionals wanting to do business.

There is a need to continue to be a space for different social networking sites to meet the requirements of demographics as there is no individual model that currently fits across all segments.

It’s well known that Alexa data is extroardinarly biased and unreliable. You should be doing this comparison at Compete.com. It is far more accurate and it is relatively unbiased.

Compete shows that myspace grew by 28% and facebook grew 88% in the last year. So facebook is growing 3 times faster that myspace

Is there really any money coming in from either of these two? despite the rumors of billions here and there, I think many many people would be really shocked by the real numbers. You say numbers don’t lie… but what about the revenue numbers? It matters not who has more traffic, because traffic does not always translate exponentially with advertising. Users get smart about ads and stop clicking on them when they have nothing new to say (although big brands could care less about CTR).

If we look closely at some of the most popular widgets on myspace, one of the top 10 is projectplaylist.com, who are currently seeking financing even though they claim to be getting 7 million hits a day, that should convert to a healthy ad revenue given all the spammy ads they support. That company is a small outfit that has little invested, with a drupal CMS, a flash widget and a MP3 search engine. So outlay being tiny and revenue coming in as expected why the need for investment? Chances are that they are not making huge profits, and for that matter nor are many of the others.

It would be good to really know who’s making what… because so far it looks like its largely hype that is running the engines.

The reason that Myspace gets so much traffic is that EVERYTHING you do on Myspace requires a new page to be loaded…. you’re always having to log in again, and spend three or four pages doing something that it seems you could do in one or two (maybe with the help of some AJAX). So this all means that more ads get viewed… (though this doesn’t change the fact that there’s still alot more uniques).

Myspace is just a bear to use, in my opinion.. it’s obnoxious, ugly, and demeaning.

I’ve not yet used Facebook, but it’s got to be a hundred times better than Myspace, technically speaking.

The problem is that the people who use Myspace don’t give a crap about any of that, they just want to talk to ‘hot girls’ from their area or whatever people use Myspace for. Whatever it is, I’m sure it’s ‘intellectually stimulating’.

(To John Kirriemuir) As you say, the demographics indicate that Facebook users have more money. This is probably true, but the teenage crowd are much more fickle and impressionable. When buying MySpace, Murdoch’s thoughts were that it would help reach the hard-to-find youth advertising market. Adverts there may have a greater impact.

Michael
what the comScore data shows is slowing growth, but it is still growth none the less, there is NO flatline in that shot. In perspective every percentage of growth for MySpace is huge, what I didn’t mention in this post is that although the percentage growth was lower for MySpace, the actual numbers were bigger compared to Facebook. MySpace is at the top of the game, any growth from this point on is a bonus, many have said that MySpace has already peaked, the numbers would suggest otherwise.

Great write-up, and I couldn’t agree more. Facebook’s feature is far superior to anything that MySpace has ever had to offer.

There is no more reason to switch social network than to change email provider. You get use to something and people know how to find you, so why bother?

“…baring a massive drop in user numbers by MySpace…”

- People still use myspace?!? I left myspace for Twitter, so did most of my friends.

It stands to reason that the fickle user base that built myspace up over night would abandon it for facebook just as quickly.

Michael vs Duncan

Dog bites Dog, I love it! Thanks for the great post, Duncan!

Duncan,

One thing you’re also failing to realize is the amount of Spammers on MySpace. It’s a heck of a lot easier to spam MySpace (even with Captchas) than it is on Facebook. I would imagine that close to half of all traffic on MySpace (seriously) are spam bots and people basically spamming. And do the the nature of most spammers having the Alexa toolbar installed on their computer, this would coincide with the apparent rise in traffic.

Just my two cents…

A very nice article.

I think twitter will crush myspace. Myspace should act fast and snap them up.

Mike (even if jokeingly)

- Reward in Public -

- Make fun of / dsicipline is private

- Myspace is worth alot of money Just not 12b

I just wrote a post about why we need to stop comparing MySpace and Facebook. Just because they are both social networking sites, does not mean they are in the same vertical nor should they be compared.

How many users are active on both services? I bet that number is very low if any.

http://www.centernetworks.com/.....nd-myspace

The problem with myspace is the searches suck you can never find people. Facebook is much easier to find old friends. Myspace reminds of Yahoo there search are very poor. Facebook you can find anyone.

I agree — Facebook and MySpace are for two different audiences, or at least have two different purposes. MySpace is “a place for friends” and Facebook is “a place for associates.”

MySpace will always be No. 1 in my opinion. Look at all cool things we have access to: movies, music, comedy, news, etc. They keep on growing. Facebook is nice but will never be as big. NEVER.

As expressed in another post, these 2 networks are geared towards two different user groups & styles. The users of each network knows & understands the difference between the 2 networks. Myspace needs a Facelift/redesign, opens API’s the same way Facebook has and implementation of better spam protection. Once this has happened Myspace will regain and revive its user community.

It is bound to hit a plateau.

There *are* two different audiences.

MySpace = Bridge and Tunnel crowd
Facebook = Cool kids

Anton

@Chris#1

I’d love to see the p & l for myspace. It’d be an interesting read to say the least. From what I have read though, Adweek reported back in February that myspace is pulling in over $25million per month in advertising revenue alone, not counting any other revenue streams, and growing at 30 percent per quarter. These stats put it at generating over $450million by the end of the year.

Since Newscorp. paid well below $580million for just myspace (they got a couple dozen other web properties as well in the deal)… Newscorp. is well into the black.

To top it off…has anyone seen the click-through rates for the banners on myspace. What a joke.

I am inclined to agree with Mike though…something big is definately happening.

if everyone I knew was on myspace and nowhere else then why would I go anywhere else? it’s that simple for millions of people and it’s going to take a hell of a lot more than a better feature set to turn market share around. IMHO

As someone who falls between the two age groups, I would like to say… that the spastic e-glitter, perpetual Match.com ads, and animated gifs that permeate Myspace are officially pulling on my patience. I have for many weeks now been considering a shift to Facebook.

Allen - I think I might agree with you that the two sites don’t necessarily have to be compared in a straight horizontal. Maybe old age has me appreciating nicer and more eye appealing UI. Or something.

-Mary from BINC

All this hoopla about Facebook was created by the media. Facebook is overrated. The sign-up process is too complicated. MySpace allows you to “own” your profile. Sure, it’s not always pleasant to look at, but so what? It’s fun. It keeps people connected. It doesn’t care what people think. I don’t understand the big fuss about Facebook vs. Myspace. There is no versus. They are two different networking sites! Get over it.

what a useless analysis. you could at the least come up with something original.

Myspace is on the decline. I say we send out a bulletin to all myspace users, to not use their accounts for a day or so, and then see what happens.

After this post google might be thiking of buying Myspace.
For me Google seems too close to buy myspace.I dont think Yahoo will.

In an interview a while ago with the founder of Facebook, I believe he quoted a $0.50 CPM. Even though they have large minimums, from media buyers I’ve spoken to MySpace is around the same, or substantially lower depending on the country (Australia for example can go as low as $0.05 CPM). So take the impression numbers and let’s say the average number of pages viewed across all users is 20. That would give MySpace 1.336 billion pageviews to work with, Facebook 460 million. Assuming an average CPM of at least $0.50 (which may be high for MySpace) that’s $668,000/month for MySpace and $230,000 for Facebook. MySpace probably has 3 times the number of employees as Facebook, more hosting costs, more legal costs, so just on a guesstimate, they probably spend at least $800,000 each month. If Facebook runs a tight ship, then they may already be worth more than MySpace as far as revenue.

As far as MySpace revenue, there is probably additional revenue from partnerships and more integrated advertising, but I still suspect that at best they’re breaking even.

I also believe that both social networks attract different kind of people. I’m more the facebook type of person because I don’t like to see too many images and gifs. I get distracted. Also, I am the kind of person who don’t have the need to have millions of friends, but like to have fun with the few I have.

When I started using Facebook I thought it was too plain, but the more I used it, the more I liked it. I like the way privacy can be controlled. There are so many ways to stay connected: status updates, posted notes, links, groups, applications, photos… and the mini feed is a great way to keep in touch with your friends!

This facebook vs. myspace thing is an illusion created by the media. Period.

You can talk feature sets and platforms all you want…. Myspace users have no idea what you’re talking about. It’s easier to get started, and simpler to look at.

I’m 28, left college as soon as Myspace was taking off. It kept me in touch with friends I had left behind. I recently tried Facebook and there is no way Facebook will overtake Myspace unless the execs at Fox screw it up. Myspace is just not as complicated to use.

Although I am seeing a lot more “friends” with both Facebook and Myspace accounts out of necessity, it’s just situational. I recently organized my class reunion and the only people on Facebook are the ones in grad school. You conform to what’s being asked of you. No one is ‘asking’ me to be on Facebook - yet.

“In the U.S., MySpace attracted almost 80 percent of all visits to social-networking sites in April, followed in a very distant second place by Facebook with 11.5 percent, according to Hitwise Pty. Ltd.” - From PC World

Currently, Yahoo’s market cap is around $36 billion, which is around 6x the yearly revenue. Using this multiple, Myspace is worth around $3.6 billion and Facebook is worth roughly $900 million.

If Yahoo could negotiate better terms say 10-15%, this would be a good deal. Regardless of the usability, Facebook is not close to catching Myspace.

facebook is just getting hyped right now because there’s nothing else to hype about (except paris hilton). i’ve checked out facebook recently and it looked like any other unattractive social networking website.

if you wanna check out a real site, check out http://www.urflick.com

Well this is weird. I actually agree with the main point Duncan is trying to make: MySpace is far from struggling. As Lana noted, MySpace is still quite dominant in terms of usage and the revenue numbers that get thrown around ($25+ million/month) are impressive. It may be ugly and technology geeks may find flaws, but the bottom line is that MySpace is still by far the general social network to beat.

Is Facebook trying to give MySpace a run for its money? Absolutely. It’s getting a lot of hype right now, which is obviously helping fuel recent growth. Whether that hype will give it long-term momentum remains to be seen. MySpace should certainly recognize that dominance today doesn’t necessarily secure dominance tomorrow. I’m sure the folks at MySpace remember the once dominant social network they killed (Friendster). But the same is true for Facebook. Duncan points out that it would probably take Facebook several years to catch up to MySpace but let’s not forget that a lot will happen over the next few years and it’s likely that MySpace and Facebook will both find themselves competing against the “next big thing.”

What intrigues me is why Rupert Murdoch “in an unguarded moment” boosted Facebook at the expense of his own MySpace. He is a pretty savvy cat who knows how to handle media, so unintentional slip seem a bit unlikely. I think he wants Facebook to do their IPO. The hype on Facebook works in his favor. An IPO “announcement” is a message to any potential buyer to put in best offer now pre IPO. A hyped up Facebook will be too expensive for that buyer. So the buyer can then take MySpace, which Murdoch would probably happily unload for a nice fat premium (based on Facebook public valuation) before the monetization reality of Social Networks sinks in.

Then again as my history professor used to say “the screw up theory of history is usually more correct than the conspiracy theory” so maybe it was just an unguarded moment.

Wow, Michael can look at a growing line and call it “flattish”. I don’t exactly understand how you can describe it like that, but whatever. I’m slowly learning to ignore any TechCrunch article regarding MySpace. Clearly a Web 1.0 company is not liked by the Web 2.0 crowd.

Too bad the likes of Craiglist and others are part of the Web 1.0 crowd as well.

I sometimes wonder if the entire Facebook userbase is concentrated entirely in California and New York. Because while I keep hearing about the decline of MySpace and the mass exodus of MySpace users to Facebook, I only know about a couple dozen people who actually use Facebook - whereas I know hundreds who use MySpace. Granted, I don’t live in the insular Web 2.0 world of San Francisco where everyone Twitters whenever they’re not on their Macbook Pros visiting Digg to read about the latest iPhone rumor posted on Engadget. But I am spot-on in the ‘typical’ demographic for the average Facebook user – 30-year-old techie who works in web design and stays firmly in touch with the latest Web 2.0 offerings. So my friends and I should be all over Facebook right? Yet for some reason we aren’t (probably because we’re at a point in life where we actually have to work a lot and don’t have as much play time for socializing.)

I too think MySpace is one of the most hideous sites on the web when it comes to design. But I’m not so detached from reality to recognize that it obviously still has massive appeal to the average joe that’s going to be tough to beat. Yeah it’s ugly. But it is extremely easy to sign on and use whereas Facebook (while aesthetically pleasing and with a lot of nice features) could easily seem more tedious and because of its cleaner design (ironically) downright sterile to the average user who’s simply looking to have fun and interact with other personalities online.

I think a more appropriate analogy for MySpace would be to compare it to AIM - they’re both networks based on interaction. Sure, AIM isn’t the hip IM platform of choice among elite techies. But if you want to stay in touch with people outside our world, you’ve got to have an AIM account because that’s what the vast majority of people use. I think MySpace might now be enjoying a similar market position where the staying power defies conventional wisdom among those in the Facebook-targeted audience.

If Murdoch/Newscorp invests in Yahoo to combine it with myspace,
AOL could buy Facebook (so Google does not get it)

Both deals make absolutely sense, since they pay for the users, not the technology.

There is a cross-media integration stiry, i.e. Movie/TV (passive user) with internet / feedback ( active user interest group)

As a traditional media company (Murdoch / Time Warner / etc) you want to keep control over what people feel and think, as it was in the past 50 years, if not the last 500 years (printing & publishing).

So they want / have to get control over the new internet communities. A subtile idea of course, but THE USER will just slowly emanzipate his thinking and emotions over the next decades.

Yahoo adds technology, that is poor in myspace. As yahoo has everything, but no real community.
AOL had a community and the technology, but even less than Web1.0 sex appeal. Therefore they need a sexy thing, to attract the masses - thats e.g. Facebook.

Just a speculation, but who else would pay that much for Facebook.

1/5 of all myspace accounts are FAKE! Created by BOTS, these girls will ask to be your friend in exchange for looking at them through their WEBCAM.
Myspace IS on the Decline and Facebook will WIN in the End unless there is a major overhaul.

You should not comment unless you have an account on both with over 200 friends and have used it for something other than doing research.

no. Everything in IT is transitory, no one lasts forever. Speaking of that, MySpace will peak, then Facebook will peak, until some other social networking site arrives.