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Rory Cellan-Jones

MySpace the moneymaker

  • Rory Cellan-Jones
  • 15 Oct 08, 14:48 GMT

They're the forgotten company of social networking - less fashionable than Facebook, less techie than Twitter, less useful than YouTube. But maybe MySpace is the only one of them that's making money. That at least was the message I took away from a meeting at Stockholm's European Technology Round Table with Travis Katz, who runs all the network's activities outside the United States.

MySpace logoHe's quite a contrast with Mark Zuckerberg of Facebook who I met last week - and that tells you something about the difference between the cultures of the two businesses. Mr Zuckerberg seems like any young developer you might meet in college or at a Silicon Valley start-up. He's shy, focussed on coding rather than commerce, and passionate about making his product better - though he finds that passion hard to communicate.

Travis Katz is older, more at ease with a crowd - I met him as he got off the stage after a pretty fluent half-hour chat in front of the banking and technology audience of ETRE. He studied politics at college and was amused by the spat that we'd just seen on stage between market fundamentalist Tim Draper and democrat donor Rob Glaser, without ever revealing his own politics. He is just as passionate about MySpace as Zuckerberg is about Facebook - but far more comfortable about talking about the business as well as the user experience.

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MySpace has of course been in the warm embrace of the Murdoch empire since 2005, and Mr Katz indicated that this wasn't a place where you just got on with growing the audience size and let the bottom line go hang.

He was keen to point out that MySpace had been profitable from the start, and had achieved revenues of $850m last year: "That's phenomenal for a company that's only five years old...it took Google and Yahoo eight years to get that far...we're monetising faster than almost any company that's come before us on the internet."

I wondered whether, in the harder times we're now facing, there was going to be room for as many Web 2.0 companies as there are out there right now. Here's what Travis Katz had to say - in an audio interview rather than the video version you'll see above:

"Some of these guys are going to fail. If you haven't figured out your business model by now and you're heading into these tough economic times I think you should be worried. If you don't have money coming in, you're going to burn through your cash."

Just about all of these social networks and other Web 2.0 companies have actually figured out that their business model depends on advertising - the trouble is they haven't really convinced their audiences of that. And while online ad spending continues to grow it's bound to flatten out if we have a serious recession.

So MySpace may look pretty annoying to the jaundiced eyes of an older networker - but, with a core audience that has grown used to seeing adverts it may have a better chance of coming out the other side of a downturn than some of its rivals.

Comments

  • Comment number 1.

    It's still as ugly as hell - I'm 25, am I too old?

    I really can't see numbers increasing with facebook doing such a good job at the moment.

    I'm also much more comfortable being connected to a company that is seeking a better customer experience than one that spouts off about profits at every opportunity, and for a long time wouldn't let users delete their data from their servers.

  • Comment number 2.

    If myspace wasn't so hideous to look at, because of the levels of customisation, which end up hindering you... then I think people might use it more... However, I abandoned it due to its hideous designs, both theirs, and their users customising.

  • Comment number 3.

    The complaints of MySpace have always been that it was too 'hideous' or 'ugly' but it gives people the freedom to express themselves or experiment with and embrace open source technology then any other social networking site. This is the essence of Web 2.0.

    Facebook has a very basic approach and is successful with it but you have to wonder if there wasn't a MySpace there probably would have been a Facebook.

    I think that Travis Katz has got it right about watching the bottom line as there is little room to grow or sustain without a healthy bank account.

 

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