In this age of economic uncertainty, volatile markets and job loss, it has been mentioned that some industries might be recession-proof.
For example, ad spend is forecast to be down this year for every single media except for Internet. And so, when we hear about the shake up at MySpace, where the founder and CEO Chris DeWolfe has been replaced by former Facebook exec Owen Van Natta because of declining revenue, you’ve got to wonder whether anything’s safe.
And, according to this article from USA Today, MySpace isn’t the only popular web site dealing with such issues. Other social networks, such as Facebook, Twitter and others are struggling (and have been for some time) to find ways to monetize. Facebook, in fact, is gearing up for an IPO, and Twitter is allegedly being eyed for takeover by Google.
MySpace’s CEO replacement was fueled by a shortfall of revenue, which owner Rupert Murdoch predicted would top $1 billion. MySpace has a 3-year deal ad-sharing deal with Google that is worth $900 million, and, according to estimates from eMarketer, MySpace raked in $585 million in ad revenue – but it still wasn’t enough.
Social networks are user-generated content, and user generated content is notoriously difficult to monetize.
There is only one certainty – the future is uncertain.