MySpace may have taken the world by storm with its 80 million registered users, but it's still a blip on the News Corp. balance sheet, says Henry Blodget. Sure, the social network's growth is
amazing--but so was the growth of sites like GeoCities and Tripod, neither of which evolved into much (what exactly has Yahoo done with GeoCities?) "[MySpace's] success has also restored Rupert's
status as a brilliant visionary," Blodget says, but it's still "so irrelevant to the financial performance of the larger entity that it doesn't even merit describing." On News Corp.'s earnings
reports, Fox Interactive Entertainment (where MySpace resides) appears in the "Other" category--contributing maybe $100 million in revenue last quarter, but likely losing up to about $50 million.
While MySpace is still working out the kinks of how to monetize itself, its revenue is nowhere even near the Internet majors, and appears to come with big losses. "GeoCities and Tripod, if memory
serves, had a similar problem," he says. You would assume that after 6 months of constant media attention the site would start to see revenue growth matching usage growth. That hasn't happened
yet--and if it doesn't in the next six months, Blodget says MySpace will fall the way of its predecessors. Perhaps traffic, after all, doesn't necessarily lead to business value.
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