I participated in a panel discussion at a conference on Saturday with a couple of young, smart, geeky teenagers -- i.e., the absolute center of most marketers' universe. These girls, Iris and Sheena, were the very definition of "early adopter" and "Generation Y" all rolled into one, a tiny yet brilliant focus group on the future of technology, social networking, and the internet.
Someone asked if Iris had a blog, and she said, "I hate to say this, but [pause] MySpace." She and Sheena both related how they checked out their MySpace accounts daily to see if friends had tried to contact them. For the two of them, both from lower-income families and members of under-represented minority groups, their technology lives consisted of homework, their podcasts, and MySpace.
If I were less of an analytical sort, I'd immediately say that MySpace is clearly winning the social networking arena. The site has the teenagers! What's more, it has hours each day of attention from these girls, from my youngest sister, my babysitter -- all of the 13- to 25-year-old demographic, really. But then I thought for an instant more, and I realized that Iris and Sheena were both the perfect example of MySpace's market domination and the reason why Microsoft, AOL, and Google will always win the race for ad dollars.
There's no money in these teenagers' MySpace behavior.
To quote that which is quoted all-too-much, show me the money. MySpace just doesn't have it. Teenagers are getting online to get connected to one another. But they're trading photos, messages, podcasts, videos, but not clicking on ads. Not buying anything. They're not researching products ... they're researching homework assignments. They're not identifying with brands ... they're identifying with friends, high schools, activities. They're not searching for jobs ... they're searching for gossip, or political ideals.
Jump up a generation, to the 25- 34-year-olds, and suddenly you're mind-bogglingly monetizable. First homes, furniture, credit cards, baby products, refinancings, trips to Europe and South America, electronics upon electronics. Where is this generation? Not on MySpace. They're creating blogs on Blogger or AIMPages or MSN, or setting up their own Typepad blogs peppered with Google AdSense.
MySpace is owned by News Corp (NWS), a stock that's currently trading within a few cents of its 52-week high; a place I hate to buy stock. Good thing, as I don't want to. I'd much rather put my money where the money is, and the early adopters just don't have any of it. The way I see it, Iris and Sheena just underscored something I've believed for a while: MySpace is a gigantic, amazingly successful, tour de force of traffic, but it's a trend, and like the Razor and the Atari 2600, will not be generating profit when it loses its place in the sun to the Next Big Thing.
Sarah Gilbert has a Wharton MBA and worked in investment banking for several years, then at a series of increasingly edgy startups before finding her calling, producing blogs for AOL. She doesn't own stock in any of the companies mentioned here.
Photo courtesy George Kelly.
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