Tuesday, April 11, 2006

The MySpace Economy

Wired News: "Tens of millions of people show up regularly at MySpace, News Corp.'s suddenly popular virtual hangout. That's good news for News Corp. boss Rupert Murdoch, who raised eyebrows by shelling out $580 million for the website last summer. But it's also an opportunity for ambitious entrepreneurs who have figured out how to make money by catering to the site's hordes of visitors.
Like mega-sites eBay and Google before it, MySpace is creating its own economic ecosystem, populated by small businesses that do everything from helping users decorate their profiles to creating tools that let advertisers target MySpace users.
It's unlikely, though, that the MySpace spinoffs approach a fraction of the revenue News Corp. is generating from the site itself. Even though some mainstream advertisers have expressed reservations about participating in MySpace's wild, just-about-anything-goes atmosphere, plenty are willing to get in front of the site's users, who have made it the second-most trafficked site on the internet, according to ComScore Networks. Analyst Richard Greenfield of Pali Research estimates that News Corp. sells $13 million in ad revenue each month."

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