Internet Marketing and Social Media Consultants

Peter Kafka at SAI has a good report on the fortunes of MySpace and Fox Interactive Media (FIM).

Growth for MySpace has leveled out while it increases for competitors like Facebook. That is the bad news, certainly. However, engagement by those who are still on the site is going up. What’s the point of having a ton of new users if they don’t spend any time on the site? The fact of the matter is that while Facebook has taken the worldwide unique visitor lead, MySpace is slaughtering them on engagement with about 50% more average minutes per visitor.

MySpace user engagement is leading to real, legitimate revenue that is only set in increase in the coming years. It’s not just a vehicle for promoting other interests within the Murdoch empire. Earnings before interest and taxes will be $155 million for FIM in 2008, and reasonably multiplying that number to generate a valuation that isn’t far off the investment Murdoch has put into it.

NewsCorp, however, is notorious for not releasing hard numbers, so a lot of this is speculation by bankers, not real statistics straight from FIM. It’s also very difficult to extrapolate real revenue predictions a few years ahead due to the fickle and rapidly changing nature of the Web.

While there are positives to look at for MySpace, will the site be able to continue drawing high engagement from its leveled-out user base? I have no idea. But don’t write them off quite yet, especially considering the engagement advantage they hold over other social networks like Facebook.

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