Is MySpace a Social Network?
- Posted: Thursday, October 23, 2008
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- Author: pradhana
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- Filed under: MySpace, Social Network
Yes, but it wants to be more.
MySpace is the largest social network in the world, with more than 122 million members. However, the company does not necessarily want to be known as king of the social networks.
As some industry observers— including some at eMarketer—have questioned social media’s financial prospects, it is enlightening to note that even the top company in the space sees the term as potentially confining.
In a briefing with eMarketer, MySpace CEO and co-founder Chris DeWolfe put it this way: “From the very beginning, we’ve always said that we were a next-generation portal and that MySpace was all about people connecting over shared interests.”
Jeff Berman, the company’s president of sales and marketing, added, “The classic portal model is content-driven, and it’s top-down with a separate communications platform.
“We sit in a hybrid space. If you think about how others in the space are trying to define what they want to be, you hear more people talking about wanting to be the starting point on the Internet. Well, that’s what we are,” Mr. Berman continued.
This is not just a matter of semantics: Ad spending on social networks still represents a small fraction of total online ad spending—much less than the search and display ads of the largest portals.
“Last year, we saw a lot of agencies and brands setting aside 10% of their budgets online for social media buys,” Mr. DeWolfe said. “We usually got 60% to 70% of it, but it didn’t really amount to the tens of millions of dollars that we thought we should be getting given our reach and impact.”
“As the US economy worsens, nearly every ad-driven Website will be under pressure to generate revenues,” said eMarketer senior analyst Debra Aho Williamson. “By positioning itself as a portal, MySpace can potentially gain a larger share of online ad dollars. But the company needs to prove that its users are receptive to display advertising.” [eMarketer]
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