Everybody agrees that News Corp.'s (NWS) MySpace is a money-losing disaster area but Twitter is an amazing business success story, right? So it's more than a little odd to discover that MySpace's traffic is still greater than Twitter's and that its ad revenue may be, too.
While trends certainly favor Twitter over MySpace right now, a comparison of the two sites' available numbers casts a pall over the notion that Twitter may be "worth" $3.7 billion. Fortune magazine's deep dive into Twitter includes this graphic (click to enlarge):
Note that MySpace's traffic is higher than Twitter's (and more to the point, so is LinkedIn's). I ran the sites through Compete, a different traffic-measuring site and found a similar pattern -- MySpace is more popular than Twitter:
Of course, Fortune also notes that 40 percent of tweets come from mobile devices and its traffic doesn't account for 10-12 percent of users on apps. But still -- MySpace is doing extremely well given that its mobile presence is virtually non-existent.
The revenue picture is murkier. Both companies make almost all their money from advertising or promotions. Last year, Twitter was estimated to have made $45 million in sales. According to documents obtained by TechCrunch, FY 2011 revenues for MySpace through June of this year will be $109 million.
That number looks about right when you compare it to News' published numbers (see page 138). Its "Other" segment, which includes MySpace, Photobucket, Fox Sports Interactive, Rotten Tomatoes, Ask Men and IGN, made $1.5 billion in FY 2010 through June of last year, which would mean that MySpace is about 7 percent of all News' interactive properties.
More revenue from flat traffic?
Twitter's revenues will climb to $150 million this year, according to eMarketer, whereas News optimistically predicts MySpace's revenues will remain fairly flat. But look again at those traffic statistics. How can Twitter command more revenues from traffic that is basically flat? (Obviously, it could actually start selling ad space on Twitter, something its founders have inexplicably refused to do.)
More worrying for Twitter are MySpace's expenses. Although the two sites are different, and have different software and hardware needs, they are nonetheless similar in that they are both websites with massive audiences. Their expenses ought to be broadly comparable. MySpace's annual expenses were $274 million last year, leaving the site horribly unprofitable. Can Twitter be any different?