MySpace disappoints

Social networking sites such as MySpace have seen a large growth in advertising revenue, but if the site’s estimated gains for this year are anything to go by, they’re not living up to the hype.

News Corporation acquired the site three years ago and saw its user base jump from 16 million to 118 million. However, advertising revenue seems to have slowed, with research site EMarketer predicting MySpace will earn $755 million this financial year, well below its forecast of $1 billion.

“The jury’s still out on MySpace’s ability to monetise,” Michael Nathanson, an analyst at Sanford C. Bernstein & Company, told the New York Times. “We don’t have much conviction in the long-term ability to grow this business based on what we’ve seen lately.”

But Chris DeWolfe, president of MySpace, is optimistic about the future. “We are far ahead of where Google or Yahoo were at this stage of growth,” DeWolfe says.

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