MySpace CEO cautiously optimistic on 2009
NEW YORK (Reuters) - MySpace, the online social network owned by News Corp NWSa.N, can grow advertising revenue in 2009, its chief executive said, even as the economic crisis erodes big media companies' bottom lines.
His comments came as U.S. stock markets tumbled again on Monday on news pointing to a deepening global economic slump.
"Our revenue and profits are significant and they continue to grow in spite of the poor economy," MySpace CEO Chris DeWolfe told the Reuters Media Summit by video conference from Los Angeles.
"We haven't really seen any impact, other than we think we could have grown even more than we have," he said, pointing to an 18 percent year-on-year growth in revenue last quarter. "We see a lot of companies switching dollars from offline media to online media, which is good for us."
MySpace, the world's biggest social networking site, lets people set up home pages featuring their writings, videos and other ways of expressing their personality and sharing things they like, such as music. The site is free, and supported by advertising.
It has been successful in launching new programs such as MyAds, which lets small businesses aim their ads at specialized portions of MySpace members for as little as $25 and as much as $10,000. The service has 9,000 advertisers now, DeWolfe said.
MySpace also plans to remain a free, ad-supported business, even as News Corp Chief Executive Rupert Murdoch talks about putting more emphasis on subscription-based businesses.
"It's not something we're continuing to contemplate... but it's not something we'd rule out either," DeWolfe said. "The core service on MySpace will always be free."
LOWERED AD FORECASTS
Web and media analysts have slashed their forecasts for online advertising in 2009 as the outlook for the economy worsened.
Earlier on Monday, Steve Lanzano, chief operating officer of MPG North America, a unit of French advertising group Havas SA (EURC.PA), told the summit he sees U.S. advertising spending dropping by 5 percent to 8 percent in 2009.
Industry researcher eMarketer on Monday cut its forecast of 2008 U.S. online ad spending to $23.6 billion from its August projection of $24.9 billion. That is an 11.3 percent rise from 2007, showing that online ad revenue continues to grow even as newspapers, radio and broadcast television see declines.
With Internet company valuations under pressure due to the advertising recession and wider economic slump, DeWolfe sees potential opportunities to buy start-ups for significantly less than six months ago.
Web companies that were worth between $200 million and $300 million just six months ago are now willing to sell themselves for $20 million to $25 million, and some have begun knocking on his door recently.
"Certainly we're interested in expanding in key markets internationally and there may be some opportunities on the music side at some point, but right now we don't have any particular companies directly in our sights," DeWolfe said.
(For summit blog: summitnotebook.reuters.com/)
(Reporting by Robert MacMillan and Yinka Adegoke. Additional reporting by Anupreeta Das; Editing by Bernard Orr)
