According to Financial Times article below, MySpace is adding more than 250,000 new users a day and will have 100 Million members by the end of the week. What the f**k? I just don’t understand the big draw. Neither does Ms. Shasta who wrote about this very same subject last week. Maybe it is because we already had our own blogs long before blogs became so mainstream, but I just don’t get the cultural phenomenon that is MySpace.
MySpace teams up with Google
By Aline van Duyn in New York and Richard Waters in San,Francisco
Financial Times, Published: August 8 2006
MySpace, the fast-growing “social networking” site, has teamed up with search giant Google in a multi-year search and advertising deal.
It confirms the emergence of Rupert Murdoch’s internet operations as a significant new force on the web.
The rapid growth of MySpace, which is adding more than 250,000 new users a day, has turned it into one of the most attractive allies for search engines, which are seeking new online audiences for their search-related advertising.
The internet site, bought by News Corp last year for $580m (£304m) and expected to reach 100m registered users this week, will get a guaranteed $900m from Google by 2010 under the deal, which both companies said could be the start of a broader alliance.
“In one fell swoop we have paid off two-thirds of our internet investments,” said Peter Chernin, News Corp’s president and chief operating officer, who negotiated the deal. “We have gotten a 70 per cent premium on our MySpace investment and are now playing with house money.”
The deal comes as rival US media group Viacom is considering a bid for Bebo – another social networking site which is the UK’s second largest – after its failure to beat News Corp in the race for MySpace last year.
Google beat Microsoft in striking the MySpace deal. Last year, the two fought for a link with AOL, eventually won by Google after the search company agreed to invest $1bn in the business.
Google used guaranteed minimum payments early on to win over online partners to carry its advertising, a move that some insiders worried would risk bankrupting the company.
But those deals paid off as keyword advertising boomed, leaving Google with a network of third-party sites that generated $1bn in the most recent quarter, or 40 per cent of its revenues.
The rapid growth of social networking sites such as MySpace and sites dedicated to user-generated content such as YouTube has threatened to tip the balance of power on the internet away from traditional portals and search engines. It is also changing the media business, and traditional media groups are trying to enter these new areas.
Mr Murdoch has been the most aggressive with around $1.5bn of internet acquisitions.
Users of these sites increasingly want to make and change the content they watch, to get feedback about it and share it with others.
Copyright The Financial Times Limited 2006