Henry Blodget’s new site, Silicon Vally Insider, is reporting that News Corp’s (NWS) MySpace will do as much as $1 billion in revenue in 2007. In December, Rupert Murdoch put that number at $30 million a month. That means the revenue run-rate could have tripled in just over six months.
What would that mean to News Corp? First, it would mean that MySpace is now as much as 4% of News the parent company’s revenue, which runs about $26 billion. But, more important, even if growth slows slightly, MySpace could move into the 10% range of total revenue next year. And, it would undoubtedly be the fastest growing unit at the company.
It is fairly safe to assume that the margins at MySpace are unusually good. Because the content is user-supplied, most costs are for technical service, storage, and bandwidth. And, those expenses are probably dropping on a per-user basis as storage and bandwidth costs move down across the industry.
Nice work, if you can find it.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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