MySpace Blossoms Into Major Web Portal

News Corp. Property Outranks Yahoo as Net's Most-Visited Site

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NEW YORK (AdAge.com) -- One year later, and it's becoming clear just what News Corp. really got for the $580 million it spent to acquire MySpace: a bona fide portal with the scale to compete with Yahoo and MSN.
MySpace is drawing the kind of traffic that the majority of web publishers can only dream about. In fact, in a watershed moment, Hitwise named MySpace the most popular site on the web.
MySpace is drawing the kind of traffic that the majority of web publishers can only dream about. In fact, in a watershed moment, Hitwise named MySpace the most popular site on the web.

"We've got a tiger by the tail," Michael Barrett, exec VP-chief revenue officer for Fox Interactive Media, said of MySpace. "Our success depends on combining these 1.0 sites like Fox Sports and 'American Idol' with this 2.0 beast that has the power to spread and drive traffic with huge force."

MySpace's watershed moment
To some teenagers -- the fickle, or trendy, depending on how you look at them -- MySpace might be yesterday's news, but the fact is it's drawing the kind of traffic that the majority of web publishers can only dream about. In fact, last week, in a watershed moment, Hitwise named MySpace the most popular site on the web, with 4.46% of all visits during the first week of July -- more than Yahoo's e-mail service (4.42%) or Yahoo's home page (4.25%).

When News Corp. acquired it, it was the fifth-most-popular site. According to Ross Levinsohn, president of Fox Interactive Media, the network of about 20 sites attracts more than 30 billion hits annually, the majority of which go to MySpace.

News Corp.'s market cap has risen by more than $1 billion since it acquired the social-networking site last year, a boost many analysts attribute to all the excitement generated by its internet plays. At the same time, MySpace has worked to shed the stigma that stuck to it in the wake of sexual-predator scandals to become Fox's de facto media portal where advertisers can target consumers through highly engaging community environments.

Jumping on the bandwagon
Last year at this time, Rupert Murdoch's purchase of MySpace had many scratching their heads as to what he would do with it. Marketers were wary about how to advertise against web pages that could easily include unsavory material. But since then, others have jumped on the social-networking bandwagon, most notably Interpublic Group of Cos. and its investment in Facebook. Just last week WPP Group created a joint venture with Live World to create communities around its clients' brands.

And News Corp. is working to rid MySpace of its sexual-predator-magnet rep. Last week, it released a public-service announcement starring Kiefer Sutherland, star of Fox's TV series "24," which is running across all Fox network and cable properties as well as Fox network sites and is backed by a multimillion-dollar budget. The PSA demonstrates how closely News Corp. is willing to tie together its Fox and MySpace properties.

Most mainstream marketing on MySpace has been kept to more structured areas of the site, such as the books, comedy, film and games sections rather than on individual profile pages. Traffic to these areas is mixed. In May, MySpace Music drew 8.15 million unique visitors, according to ComScore MediaMetrix, and MySpace Videos attracted 7 million, while MySpace Games drew just 338,000 visitors.

Entertainment properties, particularly those pushed by Fox movie studies, represent the biggest sponsorship deals for MySpace. Fox Searchlight's one-day ad-buy on every single MySpace page for its March horror remake "The Hills Have Eyes" cost about $500,000. And the MySpace presence for 20th Century Fox's "X-Men: The Last Stand" cost at least that much.

Dodge created a MySpace page for its Caliber sports car, which is targeted at the youth and college markets. The "Anything But Cute" page drew 8,500 "friends" in a week.

Fox's only digital strategy
"Without MySpace, Fox doesn't have a digital strategy right now," said Troy Young, chief experience architect at Organic, Dodge's agency for the campaign. "The closer they can align themselves with the power of MySpace, the better."

News Corp. Chairman Rupert Murdoch told investors in Australia in June that Fox Interactive Media should have $350 million in revenue in calendar 2006 and expects close to $500 million in fiscal 2007 (ending July 31, 2007).

Mr. Barrett, who does not dispute those projections, said he is in the process of doubling his sales team of about 30 and is preparing to give advertisers the opportunity to make large network buys across all Fox Interactive Media properties. "We're going to make it easy for marketers to make large buys across the entire network, with MySpace at the heart of many of those deals," he said.
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