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Advertising Revenues at Myspace Sank to $288 million in 2010

$184 million in ad revenues expected in 2011

NEW YORK, NY (Jan 18, 2011)—Ad spending on Myspace will drop to $184 million in 2011, down from $288 million in 2010 and $470 million in 2009, according to new estimates by eMarketer.

Next year’s ad spending will be even more diminished, with eMarketer estimating just $156 million will go toward the site.

eMarketer’s previous forecast, from August 2010, was slightly more optimistic. The firm estimated Myspace would draw $347 million in ad revenues this year and $297 million in 2011. Since then, however, Myspace has faced blow after blow, despite its relaunch in October 2010 as a social entertainment portal.

“The bottom has fallen out for Myspace, the company that Rupert Murdoch only a few short years ago thought of as the crown jewel of News Corp.’s online future,” said eMarketer principal analyst Debra Aho Williamson, author of the upcoming report “Worldwide Social Network Ad Spending: 2011 Outlook.”

In the third quarter of 2010, Myspace revenues were down $70 million compared to the same period the previous year, the company reported. And in January 2011, Myspace laid off nearly half of its 1,000 employees, with many of the layoffs coming from international offices.

Even as Myspace has undergone immense upheaval, it has a few things going for it that still make it attractive to some marketers, Williamson said.

“It has continued to explore new ways to make advertising more social, and in this it stands apart from Facebook, whose ad formats have remained relatively static over the past few years,” she added.

eMarketer’s ad spending forecast includes revenues from Myspace’s deal with Google to provide search functionality and display advertising.

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Posted on January 18, 2011.