MySpace Turns A Profit, Barely

from the not-even-in-the-tweens-of-millions dept

Ever since News Corp. bought out MySpace, there have been lingering doubts about the social networking site's profitability. The deal that the company signed with Google did put some of these doubts to rest, as it seemed likely that News Corp. would comfortably recoup its initial outlay. But the fundamental issue of whether a popular social networking site is necessarily a cash cow remains up in the air. Yesterday, News Corp. announced that in this past fiscal year, the company's interactive division (which is mainly MySpace) turned a profit of $10 million on revenue of $550 million. These are incredibly paltry margins. This division is still growing rapidly, so it's understandable that it would be putting a lot of money towards new investments. However, the figures include money from the Google deal, which should drop right down to profits. In other words, while the company may be crowing that the unit is now profitable, it's far from showing that things are truly successful.

Filed Under: social networking
Companies: myspace, news corp

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    Cynical Sceptic (profile), 9 Aug 2007 @ 2:07pm

    My Space great idea, bad business.

    The idea is very successful, but as a business no one every thought out the plan to make money from it. Ad revenue only generates enough income to handle the cost of doing business, if that.

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