MySpace Searches for Ad Revenue

With MySpace losing customers at a 13% pace over the past 52 weeks, they now face the difficult task of selling their advertising space to one of the big ad networks. Their last deal was made in 2006 with Google for $900 over the course of four years. But since then, their viewership has eroded as Facebook has overtaken the social web space. They currently in talks with Google, Microsoft and Yahoo but will most likely receive a significant reduction in revenue for this contract compare to the last one.

News Corp, the owner of MySpace, has been trying to find a niche that can attract a young audience to their online service. In addition to their (self proclaimed) superior privacy policies, they have been targeting musicians, comedians, authors, and designers for page creation and promotion. They feel these groups can grow and profit from groups developed around their MySpace pages. While News Corp itself hopes to draw in younger users, as young as 13 and 14, to start using the service before they discover the much more popular Facebook.

Microsoft, taking a position in Facebook for $240 million, could seem like a odd partner for MySpace. Yet Microsoft has had its own difficulties breaking into social media, so the company has kept its options open. They recently considered a buyout of AOL to boost their businesses in this area. But a partnership with MySpace to display Bing advertisement network ads, could be just what the newer search engine needs to move closer to Google in content advertising.