Rupert Murdoch’s News Corp (NWS) has hit a rough patch as the recession erodes revenue at a number of his properties including Dow Jones and his other newspapers. The company’s Fox movie and TV units could also be hurt.
Murdoch has hoped that his online initiatives would take off and that new media would help drive the total revenue of the conglomerate up. His flagship online property, social network MySpace, has not helped much. It has run behind budget as management has struggled with finding a way to make social networks fit the needs of marketers.
Plans by MySpace rival Facebook may help Murdoch, if they work.
According to The Telegraph, Facebook has found a way to bring in money from major marketers."In an attempt to finally monetise the social networking site, once valued at $15bn (£10.4bn), it will soon allow multinational companies to selectively target its members in order to research the appeal of new products. Companies will be able to pose questions to specially selected members based on such intimate details as whether they are single or married and even whether they are gay or straight."
The plan may raise the privacy issues that bedevils online companies that use data from their users to sell products and services. Facebook may not have much choice. It has still not found a way to bring in enough revenue to be profitable. Advertisers cannot figure out how to get social networks to pay off. They are viewed as sites with millions of users who visit them to post profiles and "talk" to friends. Unlike search engines where users can be targeted by their interests, finding the interests of social network members has provided nearly impossible.
If the Facebook experiment works, MySpace will almost certainly copy it. Murdoch may yet make some real money on his largest internet property.
Douglas A. McIntyre
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