Around the Net

Murdoch, Chernin: It's Hard To Sell A Social Network

Fox Interactive Media, the online services arm of News Corp. that includes MySpace, actually saw its revenue decrease from the previous quarter, falling from $230 million to $210 million. That's real bad when consider that MySpace and other FIM sites are growing, but revenue is decreasing. Also bear in mind that Google's search deal with MySpace generates about a third of that revenue.

Indeed, during the earnings call with analysts and reporters, COO Peter Chernin and Chairman Rupert Murdoch conceded that selling ads on social networks is actually very difficult. For one thing, there's too much inventory and not enough concentrated traffic. For another, users head to social networks for different reasons, different uses, which makes it difficult to target. Another big challenge is figuring out how to leverage new metrics like "friends" (for more, see Facebook: Beacon).

The fact that News Corp. is willing to say this loud is the real news, said Silicon Alley Insider's Henry Blodget, because none of it comes as any surprise. That said, the News Corp. guys had to explain why FIM's prospects aren't as good as they thought a year ago. No wonder they want to partner with the likes of Microsoft and Yahoo-who can figure out how to monetize a social network?

Read the whole story at Silicon Alley Insider »

Next story loading loading..