Chernin on MySpace: Growing Slower Than Expected

I was wrong - News Corp.’s Peter Chernin talked at length about MySpace and Fox Interactive Media on today’s quarterly earnings call. As expected, FIM revenue for fiscal 2008 (ending June 30) will be down about 10% from the original $1 billion projection. Revenue for the third fiscal quarter was $210 million, up 55% from a year ago but down 10% from the second fiscal quarter. For FIM to reach the new $900 million target, it needs to earn $270 million in the current quarter.

Key challenges to monetization, according to Chernin: huge quantity of ad inventory; the fact that ad models that marketers are used to (read: banners, search) don’t work as well in social media; and the difficulty of quantifying the economic value of a “friend” vs. other metrics from the TV and radio space that marketers are used to looking at.

Chernin acknowledged that growth is coming slower than expected at FIM. While he and other News Corp. execs did not explicitly say how much of FIM revenue is attributable to MySpace, in the past they have put it at about 80%, which works out to about $720 million in MySpace revenue in the current fiscal year.