Thursday, January 17, 2008
Facebook Far Behind in Monetization
Today's news on the social networking front centers on how MySpace's growth has reversed, but it still gets three-quarters of all traffic to social sites. A rosy picture is painted for Facebook, which grew by 43 percent in page views between December of 2007 and the prior year.Traffic is great, but monetization is all that really matters. By some quick calculations, Facebook isn't on the same page as MySpace in deriving money from visits while social networks pale in comparison to search.
According to my rough guide to earnings compared to traffic, Facebook makes approximately 1/10 of a penny per page view, while MySpace brings in a little more than a penny per page. Both these look lame when compared to Google's nearly 4 cents per page for revenue from Google.comThis tells us that in terms of understanding how to earn ad revenue from its visitors, Facebook isn't in the same league as MySpace, and it isn't in the same sport as Google. How is it that MySpace earns roughly 10 times as much per page view as Facebook? Is parent company News Corp. that much smarter? Or does its longer history give it an advantage in recruiting advertisers?
Per page view revenue is important because of the overhead involved in administering the servers and monitoring performance. I doubt that social networking sites -- despite knowing who is doing most of the browsing -- will every have the same revenue earning capacity as search sites. But they should be able to close the gap.
Posted By John Gartner at 10:01 AM
Permanent Link: Facebook Far Behind in Monetization
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