The WSJ reported today (http://online.wsj.com/article_print/SB120728763009889459.html) that Fox Interactive Media, a unit of News Corp. and owner of MySpace.com, will likely fall short of revenue expectations for the fiscal year by about 10%, or $100 million. What's more interesting, however, is exploring why the firm will come in below expectations. As we discussed in class, social networking websites and others have been relying on display advertising and sponsorships are their primary revenue stream. But there is a bit of a disconnect between advertisers and sites like MySpace, as advertisers may balk at putting their brands next to sometimes questionable content. One can easily understand the hesitation in this situation. It seems like the struggle to monetize these portfolio sites will continue for some time.
Meanwhile, Fox Interactive Media will be making a more concentrated effort into the internet advertising space by spinning off its advertising technology into a new business called "Fox Interactive Media Audience Network," which can segment and target users based on their interests across various websites in the News Corp portfolio.
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