[iDC] MySpace staff cuts

Mon Jun 29 09:04:31 UTC 2009

Long Time Lurker and just back from o/s so sorry if this is a bit delayed.
Just to add my 2 cents worth (of which the government will get around 1 and
a bit cents), some key points that may be of interest in monetizing social
media. I specialise in social network monetization strategies. Why? Because
money - whether a store of worth (past sale), menu of value (future sale) or
medium of exchange (current sale)- simply shows where large groups of people
place value. And we need to show value, it's a function of community. Follow
the value systems, you'll follow the money.

MySpace was making around $2.17 per member per year from advertising in
2006. This is not high when compared to Habbo and Cyworld that don't have
advertising any advertising. They make their money from the other strategies
such as virtual goods and sponsored areas (which is advertising masquerading
as donation microcommunity sites) and freemium services. Habbo averages
around $20 per year per member, Cyworld $17 CNN Money link
http://money.cnn.com/2006/07/27/technology/cyworld0727.biz2/index.htm

However MySpace has recently branched out into event management (launch of
albums, mothers day events for luxury brand) and the like, so they are
increasing the number of revenue streams.

I think it's also worth noting that Wikipedia in 2007/2008 had $3.5 million
worth of expenses, and raised $7 million through donations. This does not
included other donated services such as pro bono legal work, or
server/bandwidth.  Warning: pdf -
http://upload.wikimedia.org/wikipedia/foundation/2/2a/WMF_20072008_Annual_report.pdfpage
6 or 8. So running large communities without advertising or heavy
revenues is possible. In a distributed social economy the mogul looks a bit
lost. Poor Rupert. (he's Australian too so I can call him by his first
name).

I strongly believe in the peer to peer economy. Social banking such as the
LendingClub (ask Facebook members for a loan), peer to peer
telecommunications (donate sliver of your at home wifi to the mesh, get
income from telco), widgetized API sales and others. I am particularly
impressed with some of the new affiliate programs for monetizing Facebook
widgets and iPhone apps which do a revenue share back to the community
member as well as p2p merchandizing.

Incidentally, a number of iPhone and Facebook apps are making upwards of $3
million per week - Mafia Wars is one. The 3 main affiliate programs often
dangle winning micro-app revenue figures to sign up newcomers, so I keep an
eye on them.

I list 22 or so revenue streams on this chart
http://www.flickr.com/photos/silkcharm/2893602428/in/set-72157606247590916/(top
left is p2p economies, top right API based sales) and background blog
post http://laurelpapworth.com/social-media-monetization-and-revenue/ is
here.

I teach one day workshops on the social economy and will be placing the
updated Courseware for download on Scribd, Lulu and my blog in the next week
or so, under creative commons. If you are interested please email me (
laurel at laurelpapworth.com) directly for a copy. And no, I'm not selling the
e-copy, that's not how I choose to monetize my content. :)
Cheers, Laurel @SilkCharm

On Wed, Jun 24, 2009 at 2:17 PM, Sean Cubitt <scubitt at unimelb.edu.au> wrote:

>  What’s so fascinating is just how small the workforce behind a global
> player can be; pointing toards the economic scale of content production by
> users
>
> Extracted from a longer piece at
>
> http://www.theage.com.au/technology/biz-tech/myspace-cuts-twothirds-of-global-workforce-20090624-cvw1.html
>
> June 24, 2009 - 10:15AM
> Social networking site MySpace plans to cut 300 jobs, or two-thirds of its
> overseas work force, in an effort to rein in costs and focus on countries
> where it has many users and better business opportunities.
>
> The move comes a week after the News Corp. unit said it would cut 420 jobs
> in the U.S., or nearly 30 per cent of its domestic work force. Combined, the
> cuts will reduce MySpace's employee base by nearly 40 per cent to about
> 1,150.
>
> "Our goal to tap into as many international markets as possible drove us to
> create too many offices around the globe, and with them came
> inefficiencies," chief executive Owen Van Natta, a former executive at rival
> Facebook, said in a memo sent to employees.
>
> Regards
>
> sean
>
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-- 
************************
Laurel Papworth
Social Networks Strategist
PH. 0432 684992

NEW LINK!! Social Networks and Online Communities Blog:
http://laurelpapworth.com
LinkedIn: http://www.linkedin.com/in/laurelpapworth
Twitter: http://twitter.com/silkcharm
Second Life: SilkCharm Sachertorte

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