MySpace pages currently carry Yahoo search ads, served by Yahoo distributors. Also, contextual ads distributed by Revenue Science populate some MySpace pages.
Realizing its full potential
News Corp.'s $580 million acquisition of MySpace has proven a shrewd move as its community has multiplied, and big name marketers have warmed to the site's freewheeling environment. But, as Mr. Chernin acknowledged, MySpace has yet to fully realize its full potential, saying, "We've just scratched the surface of how to monetize it."
Although MySpace has blossomed into the second most popular site online behind Yahoo, according to comScore Networks, it continues to lag in ad sales due to its existing sales structure. To change that, Mr. Chernin said MySpace is in the process of largely replacing sales of "remnant inventory" with far more lucrative display advertising sold on a cost-per-thousand-impression basis. Eighty percent of MySpace advertising is currently derived from "remnant" ad sales while 20% is display. News Corp. hopes to reverse that figure and has hired a new unnamed ad sales chief to spearhead that initiative.
MySpace is also aggressively exploring sponsorship deals with big-name brands. In the last month, it has launched a microsite sponsored by Pepsi-Cola's Sierra Mist for aspiring and established comedians, and entered a sponsorship deal with Walt Disney Pictures to build buzz for this summer's "Pirates of the Caribbean: Dead Man's Chest."
Users turn to Google
Mr. Chernin explained that the No. 1 website users leave MySpace for is Google, in order to search for something. MySpace users also turn to YouTube to look for video. News Corp. is already planning to add video capabilities to the site and is beta-testing an instant-message feature, though Mr. Chernin said the company was weighing carefully what it should add. "Will our users look at that as something that hurts the site?" he said in reference to new video applications.
Beyond MySpace, Mr. Chernin told analysts about the company's moves in the mobile arena. News Corp. plans to add video to its premium phone content venture, Mobizzo. He said no other company was in the position to marry content with major internet traffic and that there was little advantage in being the first to do new-media deals.
He also said News Corp. had chosen to work out revenue shares with its TV affiliates and would now move to bulk up affiliates' websites to the point where they could begin streaming video on their sites from Fox broadcast shows such as "Prison Break" and "Bones."