After bringing in a relatively meager $90 million in ad revenue, MySpace is poised to generate ad revenues of $271 million this year – a 201.1 percent increase, according to a forecast by Merrill Lynch analyst Jessica Reif Cohen. Not only that, she also predicts that in 2008, Fox Interactive Media, of which MySpace is the largest piece, will produce its first profit: an estimated $208 million (including help from an ad sharing deal with Google), BW reports.
The piece notes that there are some obstacles MySpace will have to handle in growing its ad revenues. For instance, while pageviews were up 79 percent last month over the previous year, growth is starting to slowdown. And adults are starting to crowd into MySpace, which likely to alter its marketer-coveted teen image, as 41 percent of the traffic now comes from people over 35. A year ago, that number was 35 percent, according to Hitwise.
But MySpace has been aggressively trying to retain its teen base with a series of content deals recently, such as the deal with Michael Eisner to have first access to the 90-second webisodes of his online drama Prom Queen, which began running on Sunday. Also, co-founders Chris DeWolfe and Tom Anderson apparently fought hard for MySpace to be included in the News Corp./NBC online video venture.
BW highlights a series of deals coming down the line: development is taking place on an eBay-like service that visitors can use to sell tickets and merchandise from their personal pages. And while marketers like Burger King and Pontiac have been allowed to start MySpace accounts of their own, Murdoch has decreed that MySpace not be cluttered with ads, lest it be seen as too corporate. As DeWolfe tells BW: “Rupert was very straightforward. Don’t compromise anything, but find a way to make money.”