MySpace Not Our Space
In one of my earlier columns I touched on the phenomena known as MySpace. There has been so much global media attention on this web site that I thought we should spend a bit more time exploring what exactly is going on here.
MySpace has more than 90 million active users (over 200 million as of Nov 2007) and is growing at an overwhelming rate, with 280,000 new users joining each day. Daily page views are second only to Yahoo with over one billion impressions per day. And consider, all of this without any marketing campaign. So, let’s have a look at the picture behind the picture. Let’s think about what this means for this online magnet’s new owner.
“Technology is shifting power away from the editors, the publishers, the establishment, the media elite. Now it’s the people who are taking control.”
The users of MySpace are different to the mass consumer audiences that characterize the old media domain – the MySpace members are participants. This site is not all about connecting people and products, it is about connecting people to people. MySpace provides its users with a cool set of online tools that allow people to interact, share ideas, pictures, music, humour, etc. And, with enough critical mass, it must be the answer to selling media where audiences, not corporations, drive the action.
What is quite incredible is that MySpace recently has been re-evaluated with a figure of $15 billion, by RBC Capital. And this acquisition was made my NewsCorp just over a year ago. MySpace recently concluded a deal with Google to display sponsored advertising links and search results in exchange for 900 million US dollars over three years.
Of course, it is Google, with its $120-billion market capitalization that inspires the likes of MySpace’s new predicted value. Time will tell if all of these shy-high evaluations are warranted. For now though, the growth rates are capturing everyone’s imaginations.
The Internet has become characterized by colourful platforms which aim to achieve critical mass, while building a brand. Google did it through organizing information; then there’s eBay for retail transactions; and then there is MySpace, which gives the public at large a place on the Internet to interact with each other. They are building a virtual community where social networking is the driving force.
The most interesting idea for me about all of this is what NewsCorp plans to do with this online asset. Considering that MySpace reaches more youngsters each day than rival MTV does in a week it is a serious marketing machine. And this is the part that fascinates me the most.
While the majority of bottom-line focused corporations will be looking at how to monetize all of these eyeballs, NewsCorp is taking a view that this monster has the power to make hits.
Considering the arsenal of content in NewsCorp’s stable, with 20th Century Fox competing for this summer’s blockbuster movies with its rival studios, for example, the ability to influence the ticket line is fundamental. NewsCorp’s Ross Levinsohn, who heads up the company’s online strategy, said: “You’ll see us morphing from a content company into a marketing company.” And he is referring to a youth marketing company, because he points out “that’s where everything starts.”
This is what the second Internet wave is all about. And America is setting the pace here. Who is going to establish a community portal like MySpace here in our land? Yes, these are exciting times !