• Business Week, Friday, October 26, 2007 11:03 AM

Facebook may be ubiquitous, but rival MySpace is still three to four times the size of Mark Zuckerberg's white-hot social network. It's also older, too, which means the pressure on parent News Corp. to turn the 100 million member-plus social network into a money-making machine is building. Analysts and investors are waiting.

Meanwhile, for the first time since News Corp. bought it in 2005, the site showed a quarterly decline in unique users. Worse, the average time spent per user declined 26% year-over-year. And yet, for all the promise of selling hyper-targeted advertising across 60 to 70 million-page views, MySpace's biggest revenue driver comes from a search advertising deal with Google. Search advertising takes advantage of almost none of the targeting capabilities that a site like MySpace offers.

However, any day now, MySpace parent Fox Interactive Media is set to unveil a new targeting advertising system that takes advantage of its users' demonstrated behaviors, likes and dislikes. Whether this helps display ads become more effective is an open question. Not everyone is convinced: "Standard display ads--and I don't care how much targeting you do--it's not working well," says Deep Focus President Ian Schafer.

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