MySpace’s “Work in Progress”: Losing Money and Traffic, Blowing Google Guarantees
The takeaway: The site is losing traffic and money and no longer expects to get all of the $900 million it once counted on from a Google search deal. Also, the company really doesn’t know what to expect of the property going forward, except that it’s a work in progress.
So: Either digital media boss Jon Miller, MySpace CEO Owen Van Natta and the rest of the new team brought in this year to fix the site have an impossible task or expectations are now so low that even modest improvement will look like a huge victory.
Details from the earnings call, which I covered live this afternoon:
- Revenue was down 26 percent at Miller’s Digital Media Group (MySpace and a handful of other sites).
- That’s in part because conventional ad revenue is down and in part because search ad revenue is down.
- But isn’t Google (GOOG) supposed to be paying $900 million over three years in a search deal? Yes, but only if News Corp. (NWS) hits certain traffic/query guarantees, which isn’t happening anymore, says Murdoch.
- How much is MySpace going to miss by? This question occasions much confusion on the call. “I don’t know. But it will be a real figure,” Murdoch says. Then he throws out the number $300 million. His lieutenants suggest that it’s closer to 10 percent, or $90 million. I’ve since checked with News Corp. PR, which says the figure is “in the 100 [million] zone for the year.”
- So what’s the plan to fix all of this? “It’s a work in progress,” News Corp. officials say over and over during the call. Chase Carey, Murdoch’s new number two, uses the phrase at least three times in one answer.
- Any other color on overhaul plans? Nothing you haven’t heard before: The company is trying to become an entertainment portal instead of a social network. Carey: “We’re not trying to beat Facebook. We’re not trying to beat Twitter.”
(Disclosure: News Corp. owns Dow Jones, which owns this Web site).