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News Corp.'s MySpace is currently suffering a traffic implosion that is ruining the site's revenue structure. The company is desperately trying to reinvent itself and increase views to the site, but the bid does not appear to be working. Unable to stave the bleeding, MySpace is on the verge of losing its search ad partnership with Google. That's $300 million the company won't be earning next year.

Worse, MySpace might be putting its music service behind a paywall soon. That's a good way to ensure that traffic won't be skyrocketing any time soon.

For the last three years, Google has had an agreement with MySpace to sell ad space on the social network. But MySpace has not been able to meet its traffic goals in recent months. Come August, when the deal expires, Google won't be renewing.

According to The Wall Street Journal, "News Corp. is in discussions with Google Inc., Microsoft Corp. and Yahoo Inc. about replacing MySpace's crucial search-advertising partnership with Google."

But regardless of who decides to work with MySpace on search ads, the new deal won't be nearly as profitable for MySpace.

Google guaranteed payments of up to $900 million to MySpace in exchange for the right to sell small ads against the searches users make on MySpace.com. But if MySpace can't hit certain traffic goals, that money is not guaranteed. When the deal was negotiated in 2006, MySpace was rapidly expanding. Now, not so much.

MySpace's viewership has been in retreat for awhile. In the UK, the site's traffic has reportedly been cut in half over the last six months.

MySpace denies such a steep decline, but it can't ignore that traffic is dipping. In May, the company attracted 109 million users. Down almost 13% from the year prior, according to comScore. Meanwhile, Facebook's traffic was up 74% to 548 million global users.

MySpace has spent the last year trying to revamp its mission. The site is trying to target users under 35, with lots of music, videos, and games and focus the social connecting around those content areas.

The site is also working on succeeding where Facebook has failed on privacy. MySpace has multiple options to protect and hide information uploaded to the site. However, privacy alone is not going to convince Facebook users to migrate back to MySpace.

And TechCrunch reported in the fall that the site plans to turn its free streaming music service into a subscription product. That isn't likely to grow users.

Furthermore, MySpace might be on the block. News Corp. is currently shopping for a buyer for the Fox Audience Network, which serves much of MySpace's advertising. Since FAN is also being considered for sale, MySpace is considered as an easy package to go with it. Silicon Alley Insider has heard that MySpace is up for sale and that "Rupert wants $700 million for it."

That price is likely high, considering that Murdoch paid $650 million for the site back in 2006, when MySpace was at its peak popularity. But selling the site might be able to do what News Corp. has failed to do with its reinvention: focus the site enough to grow traffic again.

Meghan Keane

Published 6 July, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

Comments (19)

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Tom Nolan

I was never a fan of Myspace and havn't logged onto my account in years so doubt i'm one of the statistics their worried about! However, there definately has been a noticable drop in the sites standings..i mean you don't even see the myspace address on new band posters so much anymore (well i don't)...add to it current downturn the concept of paying for its music service and i reckon its onto a loser unless someone revamps quickly!

about 6 years ago

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James (Web Design Bournemouth)

I started a Myspace account in about 2001 - and i'm the same, i've not logged onto it in years - and apart from getting mails from various bands i dont want to know about that all i have got from it. But then again?..... 

about 6 years ago

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CH

I can honestly say that since creating an account in Dec. of 2003 (a few months after the site launched), for me, Myspace has lived up to the "social networking" title-- as I have met many cool people via the website, become exposed to countless new bands / music, and even met my girlfriend through the site (next month will be our 5th year anniversary)... I'm unable to wrap my brain on why Facebook has seemingly become the more popular website... Aside from FB's constant fails w/ privacy, I've always viewed Myspace as the easier of the 2 to navigate, FB's complete lack of personality & ability to customize or add any creativity to your own page will always be a huge negative for me, and as a musician who benefits from internet sites and the potential exposure to be had-- Again, I just don't understand the reason behind FB's surge in popularity VS Myspace's decline. ???

about 6 years ago

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tiffany jewellery

Aside from FB's constant fails w/ privacy, I've always viewed Myspace as the easier of the 2 to navigate, FB's complete lack of personality & ability to customize or add any creativity to your own page will always be a huge negative for me, and as a musician who benefits from internet sites and the potential exposure to be had-- Again, I just don't understand the reason behind FB's surge in popularity VS Myspace's decline. ???

about 6 years ago

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STONEBREED

I play in a band, and Myspace was a GREAT way to stay in touch with our fans, and let them know about our shows, gain more fans, find other bands, and cool people to meet, ect ect, but in the last 6 months, myspace has TOTALLY changed, and thats why they are dropping & declining, Just my opinion,but here is why our band now uses facebook & reverb nation, WAY MORE than myspace now, We use to be able to send a event invite to ALL or as many Friends as we wanted to AT ONE TIME, now you have to send 1 friend name at a time? Really? We have 15 thousand friends on our myspace, that would take forever, WE QUIT USING INVITES! Now We cant seem to send comments,WTF , if someone drops by and says Hey I like your band ect , we cant even comment back and say thanks( we have not been able to send comments in about a month now) So we have pretty muched moved our efforts,fans,friends, over to FACEBOOK, we used to be LOYAL FOLLOWERS & USERS of MYSPACE, but their recent mistakes, not getting back to you on issues, totally messing up the way bands promote on there, and not even letting you know WHY these things are happening, WHEN they might be fixed(if at all) , ect. I can see why their popularity is dying SO FAST! They better fix that stuff quick, or they better open up a facebook page!!!  

about 6 years ago

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cheap tiffany jewelry

ut in the last 6 months, myspace has TOTALLY changed, and thats why they are dropping & declining, Just my opinion,but here is why our band now uses facebook & reverb nation, WAY MORE than myspace now, We use to be able to send a event invite to ALL or as many Friends as we wanted to AT ONE TIME, now you have to send 1 friend name at a time? Really? We have 15 thousand friends on our myspace, that would take forever, WE QUIT USING INVITES! Now We cant seem to send comments,WTF , if someone drops by and says Hey I like your band ect , we cant even comment back and say thanks( we have not been able to send comments in about a month now) So we have pretty muched moved our efforts,fans,friends, over to FACEBOOK, we used to be LOYAL FOLLOWERS & USERS of MYSPACE, but their recent mistakes, not getting back to you on issues, totally messing up the way bands promote on there, and not even letting you know WHY these things are happening, WHEN they might be fixed(if at all) , ect. I can see why their popularity is dying SO FAST! They better fix that stuff quick, or they better open up a facebook page!!!

about 6 years ago

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Hopeful Spirit

I got to know many new bands and make some great friends through MySpace and until they started "fixing" things, it worked just fine! The blog changes are the worst right now. We that are still at MySpace are trying our hardest to keep up and adapt but now it is more like MyTwitterBook. I'm still holding onto hope that the new buyers will bring the good back to the Spazz but until then, I am sad to see such a great place being "fixed" into oblivion.

about 6 years ago

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PLT

in it's quest to be more like facebook, myspace is destroying itself.   myspace treats it's bloggers like the red-headed step child,  which is so ironic because the bloggers  (& music pages) are whats holding the glue together on that site.   With the recent blogging changes/glitches,  myspace is pounding in the final nail on it's own coffin.   how sad. I love myspace.

about 6 years ago

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little wolf

its awful the issues...but I love the "spaz" and all my friends there! but would love it alot more if these "issues" were fixed!! its quiet frustrating I must admit, but hanging in there!

about 6 years ago

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Missa

If MS would stop trying to turn itself into "MyFace" or "SpaceBook" things would be a lot better. The demographic base of MS has changed. Simple as that. More older people are using this service than all the young bucks. And I know that young bucks generate young money. But we have money, too. Old money. Secure money. We are a market that bears "looking at" and "catering to".  If MySpace would set itself apart, start soliciting customers like me, they might be surprised what kind of income they could generate.

The recent changes to MS have been horrible and I don't know a single person on the network who likes or appreciates what's being done. People are leaving in droves and it is the fault of MS and its advertisers for not having the brains to realize that you are killing yourself with these actions.

The blogging features on the site are what draws most of us, and are at the core of whatever "popularity" that MS has left. If MS (and others) doesn't start recognizing that what older people might not have in numbers, they make up for it in dollars, this migratory trend will only continue.

about 6 years ago

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Suzanne Jacobson

I have been on MySpace since 2005 and have loved it as a way to share my writing with others and to meet other poets and artists. I have made many friends there, and have shared their ups and downs as they have shared mine.  I also have a Facebook account, which is used for completely different purposes.  The first time I saw an application on MySpace that was obviously an emulation of Facebook, I was afraid it was going to destroy itself.  Why must they even be in competition?  Facebook was originally intended to introduce college students to their room and classmates, I believe. It has become a wonderful way to share "soundbite" communication and to find old real-time friends.  MySpace, on the other hand, has been a fabulous way to enjoy a deeper, more meaningful sharing of who we are with one another - the music, the writing, the personal interactions are an undergirding of what has been, until now, a genuine way of keeping the human touch alive in a world that has been careening toward a lonely individualism.  MySpace - whoever owns you - I hope you don't die, but go back to your roots.  Maybe some of those who have navigated away will return.  Some of us have never left, because we have loved you.

about 6 years ago

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Cinnamon

I tried Facebook on three different occasions but totally disliked everything about it. I refuse to go back. On the other hand I have been a member of My Space for several years and really enjoy it. I've made dozens of friends with great people from all over the world. Recently things are going on that are irritating to say the least. Snafus and things that don't work happen every day. It seems that they are trying to emulate Facebook in some ways and that is NOT a good thing. If people are leaving, it's because there are so many things that are messed up, it's hard to enjoy your time there. I hope it doesn't close down, that would make me extremely sad. 

about 6 years ago

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Oliver Chettle

CH, you don't get it because you are a musician. Myspace looks like a music site with social networking ad-ons. Most people are not musicians. We don't want to be told to focus our networking on music, or any other specific interest, we want to focus it on our friends. Facebook gets that. A site that only meets the needs of musicians cannot expect to win hundreds of millions of users, and without the mass user base, it is no use as a marketing tool for musicians.

almost 6 years ago

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Randy Z

I got a idea people, get rid of Facebook, Myspace, and Twitter, and get a life. I cant believe that people are attracted to talking to people where you have got to "trust" other people to put up their "real" profile. hahahaha get real 80% of all profiles are fake including pictures, And if your a band that depends on Myspace, Twitter, or Facebook I got a idea develop some REAL music like old school bands did to get recognition. I am xmetalrocker at a gmail account *hint hint* if ya want to yell at me. hahaha

almost 6 years ago

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G.E. PERRY

Myspace was great.It was easy to navigate,editor friendly and a great networking tool for bands.Then the nice people came along and ruined it.

We have a saying in the business,"If it ain't broke,don't fix it".

over 5 years ago

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naezlig

Oh dear myspace has gone horribly wrong recently . It is packed with adverts, which use up the stream bandwidth so the poor user has a very slow connection .

 Its now trashed the profile pages so its just a stream of events/comments all the pics/info/youtube vids/backgrounds that gave individuality are binned .

The only comments I see are people attempting to get petitions together desperate to get them to change it back .

   A truly hideous mess .

over 5 years ago

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Teri LaBrecque

I LOVED Myspace for by band! It was a great way to find nother bands and develope some kind of following with fan. But then I got involved with Facebook and didn't log into MySpace for a long time. NOW I cannot log in even after I changed my password like I was instsructed to do. No matter what I do, I cannot log into my site. And there are no link or email addresses listed where I can report this BS!!! So my MySpaceMusic page is locked to me... and I cannot even cancel the account. It won't let me cancel my account and start over! Can anyone tell me who to contact?

Teri

over 4 years ago

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Al Clarke

Myspace hasnt learned from it's mistakes. The governance doesnt respect the user. Support on the service is 0% - Like Teri, here, the user has no options but to leave myspace once they are frozen out of their account. The audio works only 20% of the time. Half the gadgets that attracted people now no longer work. The profile you get is two-dimensional, inflexible and restrictive to the user. Until they learn to engage the people they are trying to attract, it'll simply decay.

about 4 years ago

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Simon Nakamura, CEO at Nakamura LLC

Sorry late, but Jens Meiert (ex Tech Lead at Google) recently wrote something interesting about MySpace, as a "law":

"Whenever you allow your users to edit the code of your website, you’re doomed. It’s only a matter of time until you need to rewrite the whole service—and alienate all those users."

Isn't that exactly what happened?

almost 1 year ago

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