What Happens Once MySpace's Deal With Google Ends?

from the then-what? dept

You may recall, that a few years ago, MySpace (or, rather, News Corp.) signed a $900 million advertising deal with Google. The deal guaranteed at least that much in revenue from Google, even if the ads didn’t really earn that much. Basically, Google felt the need to do the deal to keep competitors off of MySpace. However, as people have finally started realizing that advertising on MySpace (or other social networks) isn’t working out, it’s worth noting that the clock is ticking on the deal. There’s still a bit more than a year left on the deal, but Google has been shying away from similar deals, and there’s growing evidence that ads on social networking sites just don’t pay. The Google deal may have helped keep MySpace afloat for the past few years, but without a replacement things may get trickier.

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Companies: google, myspace

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Comments on “What Happens Once MySpace's Deal With Google Ends?”

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R. Miles says:

If MySpace closed down today...

… do you think anyone would care?

Nope. They’d simply move elsewhere. The problem with sites like MySpace stems from corporate decision making.

These decisions treat the website as a revenue system, not a community system.

News Corp expects everyone else to pay for the site, and it appears they’re going to scramble to find another sucker to do so when this deal is up.

I can’t understand why businesses use the web as a revenue generating platform, instead of a useful and effective tool for their business.

MySpace has absolutely no purpose other than to generate revenue. Users find the purpose, and do so because it’s at no cost to them.

I can even speculate 90% of users don’t even know News Corp owns MySpace. As a business, that’s an incredible waste of a potentially powerful tool.

So, when News Corp’s deal is up, there’s a significant chance MySpace will fail because it no longer generates revenue.

But users won’t mind. Many are already leaving for other community sites because apparently MySpace continues to make decisions upsetting current users. Of course, I wouldn’t know as I don’t use MySpace. I can only take part of this information with a grain of salt given it’s been acquired from the web.

What’s even more shocking are businesses continuing to use the web as an advertising platform, failing to realize users are using tools to block them or simply ignoring them, instantly making them worthless.

Users are tired of ads, regardless how well they’re made. And why shouldn’t they be? If they can’t receive the information they look for without forcing a cost on them, they’ll go elsewhere to get it. It happens every day.

I’ll even use a personal example. A few years ago, I use to head to GameSpot for all my gaming information. Yes, it was bombarded with ads, but they were placed outsite the scope of the information I wanted to read.

Then, they changed by placing these ads within the information. Meh, I ignored it and scrolled a bit to continue reading. Annoying, but not as the new system they finally settled with, and that’s page interference. Want to read something? Wait for this timed ad first, then we’ll let you.

I’ve never been to the site again. I didn’t go to GameSpot to read ads. No one goes to a website to read ads. They go to use the page as a tool to do what they want to do.

But to think these pages are designed to make money is laughable. Websites that do this have no clue their website is the ad, and should be used effectively. Techdirt even states “ads=content”, and I agree.

But what Techdirt, and every website out there trying to make money, just doesn’t get is when a change of content is forced upon its user, regardless how well that content is made, users will get upset and leave.

Taking whatever profits the business expected with them.

Advertising, or “forced content switching” (so Mike doesn’t yell at me), is a dying market. It reminds me of the movie “Other People’s Money” when Danny DeVito’s character described the buggy whip makers.

We’re all in the digital era now. New ideas and new methods to generate revenue is necessary.

The problem is, and will be for some time, is the failure to give up making fast revenue rather than focus on generating the same revenue over time, especially when trying to use a tool that may be popular today, but worthless tomorrow.

This is also the reason so many people are fighting about IP and piracy.

It’s fear caused by confusion on how to effectively use the internet as a tool, not a gift horse.

Jacob Fogg says:

Re: You obviously have no clue...

I agree with you… I hate ads as much as the next guy… but the fact of the matter is, putting *content* online costs money. You need to buy and maintain servers, you have to purchase bandwidth, you have to perform backup, you have to pay for people to write content… There are so many costs to maintaining a website… especially a good one! Did you know it costs the television stations about $0.30 every time they stream the latest episode of LOST? And what do they get out of it??? Loyalty to their station? Nope… That is why they must place ads within the show. It’s annoying, but I appreciate the ability to catch up on the latest episode during my lunch break! The point is, Ads are necessary to cover the costs of maintaining that site… So GameSpot took it too far, so has MySpace in my opinion, but that doesn’t mean they are not necessary.

Your comment about ads=content is nonsense. You said “What’s even more shocking are businesses continuing to use the web as an advertising platform”. Of course they are… how else are they going to generate revenue? If every day, 5 people walked into your living room to look at something you made, you would be happy, you would invite them in, and maybe even offer them lemonade. But now, what if every day 500,000 people walked into your living room to see that something. And they all expected you to keep the room clean, build a bigger driveway to accommodate for the increased parking needs, and still offer up some lemonade. You would go bankrupt just trying to let them see your creation. The web is like your livingroom. having a few dozen, or even a few thousand people visit your website each day can remain a free joy… but once you start talking about hundreds of thousands or even hundreds of millions of visitors, the costs start stacking up at an alarming rate! Somebody’s gotta pay.

So the real question is, would you prefer to view a few advertisements and get the content for free, or pay a monthly fee to cover their costs?

Yup, that’s what I thought, you are just like the rest of us… cheep… that’s why online ads are EVERYWHERE… and that’s why online advertisement is almost making as much money as print and television advertisement.

Cheese McBeese says:

Re: Re: You obviously have no clue...

Jacob Fogg – I was following your argument right up to your last statement, which revealed to all that you are talking out of your ass.

Although online advertising is making headway, it is still LESS THAN 10% of the combined spending on Internet, print, and television advertising. That is hardly ‘almost as much’.

A bit of advice – be clear to separate opinion from fact when you don’t know what you’re talking about.

David T says:

They are destroying themselves

It’s unfortunate to see Myspace have difficulty since it was the forerunner of modern social networking. But I think the tools they provided users and the methods of generating revenue detracted from the community experience in many ways.

I am an avid Facebook user, and the clean, friendly interface/app platform is much nicer to communicate with than the gaudy, flash-banner norm of Myspace.

Meoip says:


The ads are a bunch of low rent garbage that look like scams and probably are scams. I think there is a growing expectation among internet users that respected sites vet the ads they display. I have an expectation that I won’t see ads on techdirt that lead to sites that contain malware or are selling junk products. Right now on TechDirt there are ads for Sprint, Google TV, Acro Media, and Business exchange , companies I’ve heard of. Over on myspace it’s quityourboringjob.com/succeed, http://www.wdtwireless.com, officiallifestyle., Webfetti.com, companies that I have never heard of and wouldn’t trust. I asked a Myspace using coworker about the ads and she said she would click them but in the past she had a bad experiences with the sites and wished they advertisers weren’t so sketchy (her word not mine). For this to work social media needs to use quality vetted ads not junk from whoever has a dollar to spend.

Cheese McBeese says:

MySpace needs some Urban Renewal

Advertisers need to wake up to a couple of realities with Social Networks and MySpace in particular.

First, active social networks are communities, not just eyeballs. People interact. The kinds of ads that will work and how they are placed needs to take this into account. That isn’t being done yet.

Second, MySpace is the ghetto of social networks. The quality of software tends to be poor, everything is way too pimped, and the general level of sophistication of the communities appears to be lower than elsewhere, hence the kind of ads that are placed.

I disagree with the statement that advertising doesn’t work on social network sites. Instead, I would suggest that advertisers haven’t figured out how to effectively advertise on social network sites.

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