Much of the coverage surrounding the revenue miss for News Corp.-owned [NWS] MySpace.com and the rest of its interactive media properties was negative, and rightly so. Quite simply, the company said that revenues for fiscal 2008 will be $900 million, or 10% below the $1 billion revenue target News Corp. set last August. Meanwhile, fiscal third-quarter revenues of $210 million for the three-month period ending March 31 were down sequentially from $233 million.
But the figures may be less poor for MySpace than they appear. News Corp.'s digital properties are still generating major revenues, though not by comparison to other parts of Rupert Murdoch's media empire. And when you consider that News Corp. got MySpace for a song in buying it for $580 million back in 2005, it's bound to get a decent return on that investment. Even the quarter-over-quarter decline may not be especially relevant. Granted, you don't want to see a supposed hyper-growth property show a revenue decline from one quarter to the next, but if it was going to happen it would probably be the quarter that followed the October-December period, which is typically the strongest for advertising.
It's clear that Murdoch isn't happy with the results, of course. That's why Fox Interactive Media chief revenue office Michael Barrett will be leaving the unit and why it will reorganize its sales team. News Corp. remains a good bet to get the most out of MySpace. While the social network has been around for a while, finding the best ways to make money from all those page impressions remains a challenge, though not an insurmountable one as the online advertising industry matures. -- David Shabelman