MappingTheWeb //

OK, who spiked the punch at the recent Fox Interactive analyst meeting? Apparently, some punch-drunk analyst, AKA Jordan Rohan from RBC Capital, claims that MySpace could be valued upwards of $15 billion in a few years. If Internet pundits believe this to be true and accurate, then we are most certainly in bubble 2.0 for sure (see Mathew Ingram post).

He pulls his facts and data from the most random and irrelevant sources at best. He factored Facebook’s potential $1 billion ‘valuation’ (ala Yahoo offer), YouTube’s apparent $1.5 billion valuation, and Google’s $120 market cap. Then, he threw in some advertising numbers (well, ridiculously high CPMs), mixed it all together, and came out with a $15 billion valuation (thanks to Pete Cashmore for this info). Sounds a lot like making a cake - a very expensive, inflated cake that is. I mean hey, I could have probably pulled a number out of my ass and BS’ed a couple of numbers to come up with a more accurate picture. But kudos to the guy for causing a stir in the online community (also see post from Mark Evans).

I’m not a hater of MySpace by any means. Well, it does have those tiled backgrounds and flashing text, which brings me back to my Geocities days. Urgh. But getting past that, MySpace does have a lot of things to offer. Most notably and obviously, it has an enormous userbase. It is by far the largest social network in the world. Why? Clean execution. Social networks had been done before the days of MySpace, but the company was able to simplify and execute. Navigation, product features, and even URL structure all add to the simplicity of the system. I don’t use it much myself, but I can definitely see how a teenager may find it appealing.

A definite downfall of MySpace (and a bonus for others such as Facebook) is the target audience. The majority of MySpace’s audience is in its early teens. It also attracts a large music following, including singers and bands. However, narrowing their market to one group and/or age is next to impossible. On the other hand, a site like Facebook is focused solely on university and colleges students (ignore the recent press release for now). A general age group and demographic profile can be developed. What does this mean for the company? Easy. Higher CPMs and ad dollars for Facebook. The more niche your focus, the better. I do understand that MySpace has the capabilities to target different groups based on their account settings and profile information, but the largest portion of their target audience is a group that will not attract the premium ad dollars. Niches and verticals are the future of the web, as well as the advertising and marketing world. If MySpace can somehow get a better grasp of this concept, then I see increased revenues, growth, and long-term success.

But I did hear that as many as half of all accounts may be spam… so maybe divide by 2, hey Jordan?