Making Money on MySpace

It’s always been possible to make money on MySpace if you didn’t pay much attention to the terms of service. The site has never consistently enforced its ban on commerce. That’s partly due to technical reasons–from a content filtering standpoint, the problem is much worse than detecting whether something is spam or not–and partly due to the shear size of the MySpace community. On the other hand, there have been many cases of MySpace blocking third parties or even removing commercial content from profiles. This prompted me to blog a while back that MySpace doesn’t want you to make money.

Clearly, MySpace has the right to shut them down, given their terms of service agreements. The more interesting question is the stance that the company will take in the long run with respect to the openness of their pages. Much of their success was built upon the user experience third party plug-ins/widgets provided. Now that they are big, perhaps they think they don’t need the help anymore? That would be a short-sighted stance. The Web is a big and varied place. Walled properties don’t have a history of doing well.

Well, it seems that the tide is changing under pressure for FIM to make lots more money. MySpace has been working on improved ad targeting. They have been working on an API for nearly a year, while many others are already publishing ways to access MySpace programmatically (here, here, here). And now, LA Times reports that MySpace is contemplating lifting the ban on commerce.

“We don’t want users’ pages to start looking like NASCAR,” MySpace Chief Executive Chris DeWolfe said.
But behind the scenes, the issue is being hotly discussed as DeWolfe and his team of top executives at the biggest property within News Corp.’s Beverly Hills-based Fox Interactive Media grapple with the imperative of squeezing more money out of MySpace. MySpace doesn’t want to encourage the likes of Dolce, Billard and Tequila. But its ban on commerce is difficult to enforce. If the policing efforts fail, shouldn’t it at least try to make money from the online sales it makes possible for others by taking some sort of a cut?

This is all great news for consumers, brands and, most definitely, startups looking to leverage the power of the major SNs. It will certainly be challenging for MySpace. They operate under a very different set of constraints than Facebook, for example. They’d have to figure out a way to do this so as to not jeopardize revenues from large advertisers. On the flip side, MySpace has an opportunity to deliver highly differentiated value because it’s community’s vibe is unique. All in all, the indications of a possible change in direction are refreshing.

About Simeon Simeonov

I'm an entrepreneur, hacker, angel investor and reformed VC. I am currently Founder & CTO of Swoop, a search advertising platform. Through FastIgnite I invest in and work with a few great startups to get more done with less. Learn more, follow @simeons on Twitter and connect with me on LinkedIn.
This entry was posted in Advertising, Digital Media, Facebook, MySpace, Social Commerce, startups, Web 2.0 and tagged , , , , , , , , , . Bookmark the permalink.

5 Responses to Making Money on MySpace

  1. Paul says:

    You have to be careful also not to give away too much personal info on social networking sites for identity security reasons.

  2. kpli says:

    very nice post here..i’ve bookmarked this blog for future reference..

    Hey i hope it’s not too late to wish you a Happy New Year

    Enjoy reading this blog …;)

    thanks

  3. Pingback: MySpace + Google >= Facebook? « HighContrast

  4. kuma says:

    why shouldnt we earn online given that we’re the one who contribute to the content of the site and keep that going? like on face book it’d only attract more people to go there if they can make money from using it and reading the ads while browsing the friends’ profiles.

  5. Kara says:

    given that we’re users of internet we help watch a lot of commerical-why then do we pay for internet connection and such? We pay nothing for tv here! Any thoughts on that?

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